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How My Success-Based Fee Structure Works to Your Advantage






How My Success-Based Fee Structure Works to Your Advantage | Fair Auto Appraisals


How My Success-Based Fee Structure Works to Your Advantage

If you are comparing independent auto appraisers for a total loss valuation dispute, you will probably notice two different pricing models.

Some appraisers charge a flat fee. I charge $300 for the independent appraisal, plus a 20% success fee based only on the amount I increase the insurance company’s valuation.

There is a reason I structured my appraisal clause service this way.

When you hire me for an appraisal clause dispute, I serve as your selected appraiser under the appraisal provision in your insurance policy. My role is to independently determine the vehicle’s pre-loss actual cash value, support that opinion with market evidence, communicate with the insurer’s selected appraiser, and participate in the appraisal process through a final agreement or award.

With a flat-fee model, the appraiser is paid the same no matter how long the case takes. Once the report is complete, there is a financial incentive to resolve the file efficiently and move on to the next one. Flat-fee models generally rely on handling a larger number of cases, so spending days, weeks, or even months doing additional research, addressing disagreements, and pushing the appraisal process as far as it needs to go does not increase what they earn.

My model works differently. While my appraisals are always 100% independent, unbiased, and based on the market evidence, the success fee covers the continued appraisal work that begins after the report is complete: defending my appraisal, reviewing the opposing appraiser’s evidence, identifying weak comparables or unsupported adjustments, providing additional valuation support, communicating with the opposing appraiser, and continuing through the appraisal process until a final value is reached.

If the two appraisers ultimately cannot agree on a value, my appraisal clause service also includes the umpire process. That includes screening potential umpires, reviewing their qualifications and background, working with the opposing appraiser to select a neutral third appraiser, and presenting the appraisal evidence and unresolved valuation differences for the umpire to consider.

I also offer a straightforward guarantee: If I do not increase the insurance company’s valuation by at least $1,000, I refund the $300 appraisal fee and do not charge a success fee. No strings attached and no fine print.

Where the Difference Shows Up

Suppose the insurance company values your vehicle at $24,000 and my appraisal supports an actual cash value of $30,000.

The opposing appraiser offers to settle at $26,000.

A flat-fee appraiser gets paid exactly the same whether the matter is resolved at $26,000 immediately or they spend additional time reviewing the evidence, addressing disagreements, and continuing the appraisal process toward the $30,000 value supported by their appraisal, whether that ultimately means $28,000, $29,000, or the full $30,000.

Some of my cases take weeks to resolve, and some have stretched on for months. Those cases can involve additional market research, repeated discussions between the appraisers, disagreements over comparables and adjustments, review of new valuation evidence, and sometimes disputes over the scope of the appraisal process itself.

If the two appraisers ultimately cannot agree on a value and the matter has to move to an umpire, my appraisal clause service continues through that process at no additional fee.

Why this matters

A flat fee doesn’t change whether the appraiser spends another ten minutes on the file or another ten hours. My success fee gives me a financial reason to keep doing the work necessary to get the final value as close as possible to the value supported by my appraisal.

The Appraisal Itself Is Independent

Before any discussions with the opposing appraiser begin, I develop my independent opinion of the vehicle’s actual cash value based on the vehicle and the market evidence.

That includes comparable vehicles, trim, options, mileage, condition, history, location, and other relevant factors.

Vehicle valuation is not an exact science. Two qualified appraisers can review the same market and reasonably reach different conclusions. That is why the quality of the evidence, the adjustments, and the professional judgment behind the appraisal matter.

If the market supports $30,000, my appraisal should support $30,000. The goal is not to inflate the number. The goal is to arrive at a value I can support and defend.

Run, Don’t Walk, Away From Appraisers Who Rely Too Heavily on Blue Book Values

If an appraiser relies too heavily on Kelley Blue Book, JD Power, NADA, or another pricing guide to determine value, that is a major red flag to me.

Those guides can be useful reference points, but they are not a substitute for an actual appraisal. They can miss important differences in trim, options, condition, rarity, location, ownership history, and the real market for a specific vehicle.

Nothing is more useful than actual substantially similar vehicles that are currently for sale or have recently sold. Those vehicles show what the market is actually asking and paying far better than a generalized guidebook number.

I have seen some extreme examples.

A 2001 Dodge Ram 2500 Cummins Turbo Diesel had a Kelley Blue Book private-party value of about $7,950. The final appraisal-clause settlement was $30,064.

A 2011 Lexus GX 460 showed a Kelley Blue Book value of about $13,221. The final settlement was $18,355.

A 2019 Ford Mustang GT Premium showed a Kelley Blue Book value of about $30,222. The final settlement was $36,200.

The bottom line

I build my appraisals around the actual vehicle and the actual market, not whatever number an automated pricing guide happens to produce.

The Report Is Only Part of the Service

In an insurance appraisal clause dispute, producing the appraisal report is only one part of the job.

When necessary, I go beyond the information sitting in front of me. I have contacted dealers, checked VINs and vehicle histories, identified rental and fleet vehicles, investigated questionable comparables, confirmed options and condition, and challenged adjustments that did not appear to be supported by the market.

That kind of work can become important when the two appraisers disagree about what the evidence actually shows.

What to Know About High-Volume Appraisal Services

The internet has made it easy to sell inexpensive vehicle appraisals nationwide.

Some services are built around processing a high volume of files and rely heavily on standardized or software-generated reports. That can be an efficient way to handle a large number of cases, but efficiency for the appraisal company and the best result for the vehicle owner are not always the same thing.

I prepare custom, 40+ page USPAP-compliant appraisals built around the specific vehicle and supported by real market evidence.

I have also published an example comparing one of my reports with an actual opposing appraiser’s report so you can see the difference for yourself. In that case, the opposing report was only a couple of pages and provided very little support for the value compared with the detailed market analysis in my appraisal.

I am also happy to send a sample appraisal before you hire me.

A lower appraisal fee may look attractive upfront, but the quality of the appraisal and what happens afterward can matter far more than the initial difference in price.

A Lower Upfront Cost With a Guarantee

My upfront appraisal fee is $300.

The 20% success fee is charged separately for the continued appraisal work that follows after the report is completed and is calculated only on the increase I actually obtain over the insurance company’s valuation at the time you hire me.

If I do not increase that valuation by at least $1,000, I refund the $300 appraisal fee and do not charge a success fee.

That also gives me a reason to be selective about the cases I accept.

If I review your valuation and believe the insurance company is already reasonably close to fair market value, I would rather tell you that before you spend money hiring me.

That is why I offer a free second opinion before you sign up.

I Also Know What to Look for in the Insurance Company’s Valuation

A strong appraisal is not just about finding good comparable vehicles. It also means understanding how the insurance company arrived at its number.

Many insurers use CCC One valuation reports, and I routinely see issues involving incorrect trims, missing options, questionable comparable vehicles, condition adjustments, mileage adjustments, and other problems that can materially affect the valuation.

If your insurer used CCC, I have a separate guide explaining how to dispute a CCC One market valuation report.

What to Ask Before Hiring an Appraiser

If you are comparing appraisers, don’t look at price alone.

Ask what you are actually getting for that fee.

Does the appraiser prepare a detailed, market-supported valuation?

Do they personally communicate with the opposing appraiser and stay involved throughout the appraisal process?

Will they investigate questionable comparables and unsupported adjustments?

Will they stay involved if the case takes weeks or months to resolve?

Will they stay involved and continue handling the appraisal process if the case has to go to an umpire?

And what happens if they are unable to improve the insurance company’s valuation?

Keep in mind

A cheaper appraisal is not much of a bargain if the appraiser stops short and thousands of dollars in supported value are left on the table.

Frequently Asked Questions

Does the success fee affect your appraised value?

No. My appraisals are always independent, unbiased, and based on the market evidence. The success fee covers the continued appraisal work that begins after the report is completed.

What does the $300 fee cover?

The $300 fee pays for my independent appraisal and opinion of the vehicle’s actual cash value.

What does the 20% success fee cover?

The success fee covers the continued appraisal work after the report is completed, including defending my appraisal, reviewing the opposing evidence, providing additional valuation support, communicating with the opposing appraiser, and continuing through the remainder of the appraisal clause process.

Is there an additional fee if the case goes to an umpire?

No. My appraisal clause service continues through the umpire process at no additional fee. An umpire is rarely needed, but it can become necessary if the two appraisers ultimately cannot agree on a value, particularly in more complex or subjective cases involving high-value, rare, or heavily modified vehicles. Umpire fees are typically around $500 to $800 and are divided equally between the insured and the insurance company.

How is the 20% success fee calculated?

The success fee is calculated from the increase I obtain over the insurance company’s valuation at the time you hire me.

What happens if you do not increase my valuation by at least $1,000?

I refund the $300 appraisal fee and do not charge a success fee.

Why would I pay a success fee instead of hiring a cheaper flat-fee appraiser?

Because the initial fee is only part of the equation. You should also compare the quality of the appraisal, the work performed after the report is complete, and whether the appraiser remains involved when the case becomes difficult or time-consuming.

Do you use Kelley Blue Book or JD Power to determine value?

I may consider pricing guides as reference points, but my appraisal is based primarily on actual market evidence and substantially similar vehicles.

Do most cases require an umpire?

No. More than 95% of my appraisal-clause cases are resolved directly between the two appraisers without requiring an umpire.

If your insurance company has undervalued your total loss vehicle, I offer free second opinions. I’ll review the valuation and tell you honestly whether I think it’s fair or worth pursuing further.

Get a Free 2nd Opinion →

DR
Dustin Rees

Owner, Fair Auto Appraisals LLC

ASCAA Certified Independent Vehicle Appraiser. After personally experiencing two total loss insurance disputes, including watching his 1998 Dodge Ram Cummins catch fire on the I-15 heading out on a camping trip and then fighting the insurer for months, Dustin founded Fair Auto Appraisals to help vehicle owners nationwide get fair settlements.