Haris Ashley
California is the third-largest state in the US and is home to over 9,000 licensed real estate appraisers, the highest number in the country. While there is no legal requirement for appraisers to have insurance in California, many lenders and clients require that appraisers carry California Appraisers Errors and Omissions Insurance. This type of insurance covers the cost of legal fees and settlements if a client sues over a mistake in an appraisal.
| Characteristics | Values |
|---|---|
| Appraiser insurance requirements mandated by California's State Board | None |
| Requirements mandated by the California Office of Real Estate Appraisers | Errors and Omissions Insurance |
| Requirements mandated by the California Department of Insurance | 24 hours of continuing education every two years, including 3 hours on ethics |
| California Code of Civil Procedure | 1282.2 |
| California Insurance Codes | Standard Form Fire Insurance Policy |
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What You'll Learn
- California real estate appraisers must have Errors and Omissions Insurance
- California Code of Civil Procedure 1282.2 must be followed
- California Insurance Codes outline the role of a property insurance appraiser
- California Standard Form Fire Insurance Policy includes appraisal provisions
- California law requires 24 hours of continuing education every two years
California real estate appraisers must have Errors and Omissions Insurance
While there are no specific appraiser insurance requirements mandated by California's State Board, the California Office of Real Estate Appraisers (OREA), many lenders and clients require that California real estate appraisers carry Errors and Omissions Insurance. This insurance is essential for protecting real estate appraisers from financial losses in the event of a lawsuit.
Errors and Omissions Insurance, also known as professional liability insurance, helps cover the costs that arise when someone sues, such as legal fees, court costs, and settlements. It offers protection against various risks, including claims related to assessment errors that result in property damage. This type of insurance is particularly important for real estate appraisers in California due to the strict regulations they must adhere to, which can increase their risk of facing legal challenges.
By having Errors and Omissions Insurance, California real estate appraisers can demonstrate their commitment to maintaining high professional standards and show clients and regulatory bodies that they take responsibility and care seriously. It provides peace of mind, allowing appraisers to focus on their work without the constant fear of lawsuits.
OREP Insurance Services, LLC specializes in providing Errors and Omissions Insurance for real estate appraisers in California. They offer competitive rates, same-day coverage and confirmation, as well as business-building benefits and unrivaled business support.
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California Code of Civil Procedure 1282.2 must be followed
California is home to over 9,000 licensed real estate appraisers, the highest number of appraisers in the country. While there are no specific appraiser insurance requirements mandated by California's State Board, the California Office of Real Estate Appraisers (OREA), many lenders and clients require that appraisers carry California Appraisers Errors and Omissions Insurance. This insurance covers appraisers in the event of a claim or dispute.
Appraisers in California are encouraged to seek Errors and Omissions insurance to protect themselves from potential claims and disputes. This type of insurance provides coverage for appraisers in case of errors, omissions, or other issues that may arise during their professional activities. By having this insurance, appraisers can have peace of mind and focus on providing accurate and unbiased evaluations of properties or assets.
It is important for appraisers to be aware of the legal requirements and guidelines, such as the California Code of Civil Procedure 1282.2, to ensure that their practices are compliant and to maintain the integrity of their profession. Failure to adhere to these standards may result in challenges to their appraisals and potential consequences for their professional standing.
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California Insurance Codes outline the role of a property insurance appraiser
California is home to over 9,000 licensed real estate appraisers, the highest number of appraisers in the country. While there are no specific appraiser insurance requirements mandated by California's State Board, the California Office of Real Estate Appraisers (OREA), many lenders and clients require that appraisers carry California Appraisers Errors and Omissions Insurance.
A property insurance appraiser is someone capable of giving a professional, disinterested opinion on the value of a loss. They have no interest or stake in the outcome. Property insurance appraisers are typically professionals like adjusters, contractors, engineers, or anyone with relevant, specialized knowledge. An insurance appraisal is a process in which the insured and the insurer will make a good-faith attempt to resolve disputes without resorting to litigation. These disputes concern the amount of loss and not coverage issues.
In California, insurance appraisers must follow the California Code of Civil Procedure 1282.2. This code requires the appraisal panel to adhere to specific guidelines, such as allowing each party to demand a list of witnesses and documents from the other party within 15 days of receiving the notice of hearing. It also grants the neutral arbitrator certain powers, such as adjourning the hearing and ruling on the admission of evidence.
Additionally, California Insurance Codes outline specific provisions regarding appraisals. For policies originated or renewed after January 1, 2002, these provisions apply to residential property insurance, earthquake insurance, and basic residential earthquake insurance. When the insured and the insurer disagree on the actual cash value or the amount of loss, each party can select a competent and disinterested appraiser, who will then work together to select an umpire. If the appraisers cannot agree on an umpire, a judge in the state where the property is located can be requested to make the choice. The appraisers will then appraise the loss and, if they cannot agree, submit their differences to the umpire. A decision agreed upon by any two of the three parties sets the amount of loss.
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California Standard Form Fire Insurance Policy includes appraisal provisions
California is home to over 9,000 licensed real estate appraisers, the highest number in the country. While there are no specific appraiser insurance requirements mandated by California's State Board, the California Office of Real Estate Appraisers (OREA), many lenders and clients require that appraisers carry California Appraisers Errors and Omissions Insurance.
The California Standard Form Fire Insurance Policy includes appraisal provisions. The standard form provides that, if the insurer and the policyholder cannot agree on the value of the ACV or the amount of loss, then either party may make a written demand for the dispute to be resolved by appraisal. This is supported by Insurance Code §2071(a), which states:
> "In case the insured and this company shall fail to agree as to the actual cash value or the amount of loss, then, on the written request of either, each shall select a competent and disinterested appraiser and notify the other of the appraiser selected within 20 days of the request. Where the request is accepted, the appraisers shall first select a competent and disinterested umpire; and failing for 15 days to agree upon the umpire, then, on request of the insured or this company, the umpire shall be selected by a judge of a court of record in the state in which the property covered is located. Appraisal proceedings are informal unless the insured and this company mutually agree otherwise."
The appraisal process is limited to determining the value of the loss or of items claimed to have been damaged; it cannot be used to determine disputed issues of coverage under the policy or other issues such as causation. The insuring clause of the standard form requires the policy to "insure... against all loss by fire [and] lightning." Insurers may issue policies that do not include the terms mandated by the standard form, but if they do, those provisions must be substantially equivalent to or more advantageous to policyholders than the terms mandated by the standard form.
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California law requires 24 hours of continuing education every two years
California does not have any specific insurance requirements for appraisers mandated by the state's board. However, many lenders and clients require appraisers to carry California Appraisers Errors and Omissions Insurance.
Regarding continuing education, California law requires real estate appraisers to complete 56 hours of state-approved continuing education every four years. This includes 7 hours of USPAP training, with the 7-hour USPAP Update course due every two years. The full 56 hours of continuing education is required midway through the four-year cycle. California appraisers must also take a 4-unit course on California Law every four years.
Renewals due on or after January 1, 2023, must comply with new continuing education requirements, including 1 hour of Cultural Competency and 2 hours of Elimination of Bias. The new requirements also include the 7-hour National USPAP Update Course or its equivalent as determined by the Appraiser Qualifications Board (AQB), the 4-hour course entitled Federal and State Laws and Regulation, and a minimum of 35 hours of additional approved continuing education.
Various online platforms, such as McKissock and Appraiser eLearning, offer convenient and cost-effective ways to fulfill California's appraiser continuing education requirements. These platforms provide interactive livestream sessions or self-paced online courses to help appraisers stay compliant and advance their careers.
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Frequently asked questions
There are no specific appraiser insurance requirements mandated by California's State Board or the California Office of Real Estate Appraisers (OREA). However, many lenders and clients require appraisers to carry California Appraisers Errors and Omissions Insurance.
An insurance appraiser provides a professional and impartial opinion on the value of a loss. They have no interest in the outcome and are typically professionals like adjusters, contractors, engineers, or anyone with relevant specialized knowledge.
An insurance adjuster acts in the best interests of the insurance company and tries to minimize their liability. On the other hand, an insurance appraiser is impartial and provides a second evaluation of the amount of loss after the insurance company's initial determination.
In California, if the insured and the insurance company disagree on the amount of loss, either party can request an appraisal. Each party selects a disinterested appraiser, who then chooses an umpire. The appraisal process is informal unless both parties agree otherwise. The appraisal panel decides on the issues related to the amount of loss but cannot make causation or coverage determinations.
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