Most insurance policies contain a clause that allows you to formally dispute a claim amount. This third-party opinion on the damage can be set in what is called an appraisal. The appraisal is conducted by an independent disinterested panel. This is indicated in your policy’s appraisal clause. Here is an example of an appraisal clause.

“If you and we fail to agree on the amount of loss, either one can demand that the amount of loss be set by appraisal. If either makes a written demand for appraisal, each shall select a competent, independent appraiser and notify the other of the appraiser’s identity within 20 days of receipt of the written demand. The two appraisers shall then select a competent, impartial umpire. If the two appraisers are unable to agree upon an umpire within 15 days, you or we can ask a judge of a court of record in the state where the residence premises is located to select an umpire. The appraisers shall then set the amount of loss. If the appraisers submit a written report of an agreement to us, the amount agreed upon shall be the amount of the loss. If the appraisers fail to agree within a reasonable time, they shall submit their differences to the umpire. Written agreement signed by any two of these three shall set the amount of the loss. Each appraiser shall be paid by the party selecting that appraiser. Other expenses of the appraisal the compensation of the umpire shall be paid equally by you and us.”

This is a faster and lower cost option than litigation and is often used successfully by the policyholder to obtain a fair settlement. Once a disagreement occurs between a policyholder and the insurance company, the appraisal clause can be invoked by either party.

You as the policyholder would appoint a claims professional such as a Public Adjuster or Insurance Broker as your appraiser. The insurance company will appoint their own appraiser. The policyholder appraiser and the insurance company appraiser will select an umpire. One may be appointed by the court if the two cannot agree on a candidate. Both appraisers will inspect the property and review the claim line by line. Any disputes between the appraisers in their damage valuations are sent to the umpire who then reviews the materials and breaks ties. This panel of three helps ensure that an accurate dollar amount is awarded. Any two of the three agreeing will bind the appraisal award with their signature. The disputing parties pay their appraisers and the split the fee of the umpire accordingly.

We are experts in the procedural aspects and the “nuts and bolts” of appraisals.

For more information, please contact us.