I hired a “certified appraiser” to value my cellar for my divorce settlement. He valued my 1945 Mouton Rothschild as a “1995” due to a typo, valuing it at $600 instead of $15,000. I settled the divorce based on his number. Months later, I realized the error. I lost $14,000 because of his spreadsheet typo. My homeowners insurance said, “Not our problem.”
Key Takeaways
- Homeowners Insurance Doesn’t Cover “Bad Advice”: Your policy covers physical damage, not financial loss caused by a third party’s incompetence.
- Errors and Omissions (E&O) Insurance: You need to sue the appraiser. His “Professional Liability” (E&O) insurance is designed to pay for this exact mistake.
- The “Hold Harmless” Clause: Check the contract you signed with the appraiser. Did you agree to limit his liability to the cost of the appraisal ($500)? If so, you might be blocked from suing.
- Statute of Limitations: You usually have 1-2 years to file a claim for professional negligence.
The “Why” (The Trap)
The trap is Professional Negligence.
This is not a property claim. This is a liability claim against a service provider.
The secondary trap is hiring an appraiser who does not carry E&O insurance. If he is just a “guy who knows wine” and has no insurance, you can sue him, but he might be broke.
The Investigation (I Called the Appraisers Association)
I asked about the standards for liability.
- Standard: A USPAP-certified appraiser carries liability insurance. A local sommelier usually does not.
- Recourse: If the appraiser is a member of the Appraisers Association of America, you can file a grievance.
Comparison Table
| Mistake | Who Pays? | Policy Triggered |
| Appraiser drops bottle | Appraiser | General Liability (Property Damage) |
| Appraiser undervalues bottle | Appraiser | Errors & Omissions (Financial Loss) |
| You misread the report | No One | N/A |
Step-by-Step Action Plan
- Demand the E&O Certificate: Before hiring an appraiser, always ask: “Please send me your Certificate of Insurance for E&O.”
- [IMAGE: Screenshot of a Certificate of Liability Insurance form highlighting ‘Professional Liability’]
- Document the Loss: You need to prove the specific financial harm (e.g., “I received $7,000 less in the divorce settlement because of this valuation”).
- Send a Demand Letter: Have a lawyer send a formal letter to the appraiser demanding the difference. His insurance carrier will likely step in to settle.
FAQ
Can I claim this on my Legal Shield/Umbrella policy?
No. Umbrella covers you when you get sued. It doesn’t pay you when someone else screws up.
What if the appraiser is my friend?
Then you have a choice: Lose the money or lose the friend. Business is business.