All About appraisals

In situations where there is a disagreement between you and your insurance company regarding the loss amount or damage extent in a claim settlement, and negotiations prove unproductive, you have the option to resolve the claim by invoking an appraisal clause outlined by your insurance company.

While the term "appraisal" is commonly associated with obtaining a professional valuation for real estate or personal property, many property owners are unfamiliar with the insurance appraisal process. When consensus on the compensation an insurer should provide for a claim settlement cannot be reached, a nonjudicial resolution method often exists for addressing disputes between insurers and property owners.

The procedures for activating an appraisal clause and its details are typically found in the Conditions section of most homeowners or business owners' policies (BOP). Usually, an appraisal clause is described as follows: 

"If an agreement on the loss amount cannot be reached, either party can request an appraisal. In this scenario, each party selects a competent and impartial appraiser within 20 days of receiving a written request from the other party. The two appraisers then jointly choose an umpire. If an umpire cannot be agreed upon within 15 days, either party can ask a judge in the state where the 'residence premises' is located to make the selection. The appraisers independently determine the loss amount. If they provide a written agreement to us, that amount becomes the agreed-upon loss. If no agreement is reached, the appraisers present their differences to the umpire, and a decision endorsed by any two of them establishes the loss amount."

Activating an appraisal necessitates both parties to: 

1) compensate their appointed appraiser 

2) equally share the other expenses related to the appraisal and umpire.

In instances of pricing disputes, utilizing an appraisal can be a swifter and more cost-effective method for resolving a claim. Invoking an appraisal proves to be an efficient means of settling claim disagreements without the need for prolonged and expensive litigation.