Settlement disagreements are part of the property damage claims process. But what happens when your insurance carrier refuses to negotiate and come to the table with a reasonable offer? If your policy has an appraisal clause, invoking it might be your best option for resolving a dispute over the amount of your loss without the cost, delay, and public exposure of litigation. 

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What to Expect From the Insurance Appraisal Process

Most property damage insurance policies include an appraisal policy provision that is meant to serve as an alternative to litigation when a policyholder does not agree with their provider on the amount owed for a claim. Most policies require a formal written demand to be sent to the carrier before the appraisal process can start. 

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Either side can invoke appraisal. Carriers sometimes demand appraisal, too, to lock in a lower figure or slow a claim's momentum. If your insurer invokes appraisal, the same process applies.

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Once the process is initiated, both the insurer and insured find a qualified, impartial appraiser to evaluate the loss amount. If both side’s appraisers can come to an agreement, that amount will be the settlement. 

If the two appraisers can't find common ground, then a third appraiser (called an umpire) settles the difference. The two appraisers select the umpire themselves—neither side can appoint one unilaterally—and if they can't agree, either party can ask a court to appoint one. 

Under most policies, an award becomes binding when any two of the three agree, meaning your appraiser and the umpire can agree and bind the insurer, or the two appraisers can settle it between themselves and the umpire never weighs in. 

The umpire's decision cannot be negotiated, and the insurance carrier is required to accept the umpire’s findings.

Insurance appraisal can be a cost-efficient way to resolve a dispute over the amount an insurer owes the insured. However, it is not without its drawbacks. 

For one, you will have to find and pay for an appointed appraiser, while splitting other costs incurred in the appraisal process equally with the carrier. Additionally, there are no guarantees in the appraisal process. The appraiser you appoint might agree with your initial damage estimate, or they might decide on a different number entirely. Regardless of what they decide, both you and your insurer will be bound by the result. 

With that being said, insurance appraisal is typically much cheaper than the alternative: hiring a lawyer. An experienced appraiser can provide a thorough, well-documented valuation of your loss as you pursue a fair claim valuation.

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When is Appraisal Appropriate?

Most appraisal clauses require that you make at least some effort to negotiate with your insurance before insurance appraisal becomes an option. Appraisal is generally only applicable in situations where both parties agree on the extent of coverage but disagree as to the amount of the loss.
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For example:

• When it applies: Both you and your insurer agree that your policy covers the damage done to your roof, but you disagree on how much the insurer should pay to fix it. Insurance appraisal might be a good way to solve this dispute. 
• When it doesn't: You believe the damage should be covered, but your carrier says that the damage was due to an excluded cause and refuses to cover it. Insurance appraisal cannot help you solve this dispute. 
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Finally, appraisal is not usually an option when a claim has been denied entirely. In this situation, or when you and your carrier disagree on whether or not damage should be covered, you’ll need the help of a Public Adjuster to re-open or negotiate your claim. In situations of bad faith or disputed policy interpretation, you may choose to seek legal guidance. 

Note that some states limit how long you have to demand appraisal. Also, depending on your policy, invoking appraisal doesn't necessarily pause the time limit designated to file a lawsuit. These are important details to confirm as you consider the appraisal process. 

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Is Invoking Your Appraisal Clause Worth It?

Appraisal should never be your first solution. If you are unhappy with your settlement amount, consult with a Public Adjuster to see if they may be able to help with getting the carrier to recognize the validity and value of your claim. 

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At Tiger Adjusters, we have established relationships with talented appraisers who step in to be sure our clients receive a fair, unbiased claim settlement. When we reach a stalemate with a carrier, we pass the baton to an appraiser in our network to bring your claim across the finish line. 

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While the appraisal process is cheaper than a lawsuit, it still costs money—which means the amount in dispute needs to be worth more than you’ll end up spending in appraisal fees.
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Additionally, homeowners need to consider how long they are willing to wait for a settlement before they invoke that appraisal clause. While the timeframe is usually much quicker than a lawsuit, the appraisal process can still sometimes take upwards of 6 months to a year, especially if the carrier is uncooperative throughout.
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Having a licensed Public Adjuster on your side can help guide you as you consider whether starting the appraisal process is right for you. 

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Finding An Appraiser You Can Trust

The most important decision you make during the appraisal process is who to hire as your impartial appraiser. After all, the fate of your claim amount is in their hands! You need someone who is qualified to determine the true value of your property’s damage, and who can be trusted to be impartial.
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Tiger Adjusters has both in-house appraisers and partnerships with experienced appraisers across the country. Reach out for claim assistance today.