Insurance Claim Appraisal Process

Understanding the Appraisal Clause in Insurance Claims: A Cost-Effective Alternative to Litigation

When disagreements arise between policyholders and insurance companies regarding the actual cash value (ACV) or amount of loss after a claim, the appraisal clause provides a valuable dispute resolution mechanism. This process, outlined in most property insurance policies, offers a more efficient and affordable alternative to costly litigation or lawsuits. By invoking the appraisal clause, both parties can resolve valuation disputes without the need for courtroom battles, saving time and legal expenses.

How the Appraisal Process Works

The appraisal process begins when either party—the policyholder or the insurance company—submits a written request to invoke the appraisal clause. Once initiated, each side must select its own competent and impartial appraiser. These appraisers should have expertise in property valuation and damage assessment to ensure a fair evaluation.

After selection, the two appraisers typically collaborate to choose a neutral third-party umpire. The umpire’s role is critical, as they mediate disagreements between the appraisers and ultimately determine the final loss value that the insurance company must pay.

Roles and Responsibilities in Appraisal

Appraisers’ Duties

• Each appraiser conducts an independent assessment of the loss, determining the actual cash value (ACV) and total repair/replacement costs.
• They submit detailed reports to the umpire, outlining their findings and justifications for the claimed amounts.

Umpire’s Final Decision

• If the two appraisers disagree, the umpire reviews both reports and makes a binding decision on the final valuation.
• The umpire’s ruling is typically enforceable, meaning the insurance company must pay the determined amount (unless other policy disputes arise).

Costs and Fees in the Appraisal Process

One advantage of appraisal over litigation is its cost efficiency:

• Each party pays for its own appraiser.

• The umpire’s fee is split equally between the policyholder and the insurer.

• Compared to legal fees, this process is far more affordable while still ensuring a fair resolution.

When Should You Consider Appraisal?

Appraisal is particularly useful when:

• The insurer’s valuation seems unreasonably low compared to contractor estimates.

• There’s a dispute over depreciation calculations or scope of damage.

• You want to avoid a prolonged legal battle but still need an impartial assessment.

How Miller Public Adjusters Can Help

If you’re facing a dispute with your insurance company over a claim’s value, Miller Public Adjusters can serve as your designated appraiser. Our team has extensive experience in:

• Accurate property damage assessments

• Negotiating fair claim values

• Navigating the appraisal process efficiently

Don’t let an undervalued claim leave you underpaid—contact us today to discuss whether appraisal is the right solution for your case.