Insurance appraisal clause: Resolving a deadlock in your claim

What if, after all you’ve done, you and your adjuster/insurance company are at an impasse over the value of your property? Now is the time to invoke the Appraisal Clause in your insurance policy. The Appraisal Clause is found in all insurance policies and was designed to establish a procedure that allows disinterested parties to settle disputed amounts. The appraisal clause can be found in all homeowners policies, all policies covering commercial buildings, all commercial policies, as well as all renters policies… even auto policies.

The Appraisal Clause is usually found in the policy under the heading “Conditions” and/or “What to do after a loss.”

Do not confuse the Evaluation process with Arbitration. The Evaluation Clause does not bind either party to its conclusions. In arbitration, the arbitrator’s findings are usually binding on both parties.

The Appraisal Clause is intended to be the method for determining the values ​​in dispute. The appraisal cannot be used to determine what is covered. That must be decided by a court of law. If you have a dispute with the company about whether or not something is covered, you should file a lawsuit against your insurer to get that determination.

HERE IS A VERY IMPORTANT TIP!!! You don’t have to wait until you’re hopelessly deadlocked with the adjuster or insurance company to invoke the Appraisal Clause. The Appraisal procedure has been invoked more frequently by insurers, who have greater knowledge of the terms and conditions of their policies. But you, the insured or policyholder, can do so at any time.

I’m not suggesting you stop cooperating. But occasionally, I talk to people who are having real difficulties with their adjuster or insurance company. Taking the claim to Appraisal sometimes stops all the drama.

In my experience as an appraiser and arbitrator, I have found that disputes can be resolved more quickly through an appraisal than the resolution you could get through litigation. The cost of the appraisal process is also significantly lower than the cost of litigation.

This is what the Appraisal Clause in my homeowners insurance policy says:

“If you and we do not agree on the amount of the loss, either of us may
demand an appraisal of the loss. In this case, each party will choose
a competent appraiser within 20 days of receipt of a written request
of the other The two evaluators will choose an arbitrator. If they
cannot agree on an arbitrator within 15 days, you or we may request
that the election be made by a judge of a court of record in the state
where the “place of residence” is located. The appraisers
set separately the amount of the loss. If the appraisers file a
agreement with us, the agreed amount will be the amount of the loss.
If they do not reach an agreement, they will present their differences to the arbitrator.
A decision agreed by either of the two will fix the amount of the loss.

Each part:
has. pay your own appraiser, and
b. Defray the other expenses of the appraisal and arbitrate equally.

Each party appoints an independent and disinterested appraiser. In past experience, I have seen the insured or policyholder try to designate the Public Adjuster who is handling their claim as the adjuster. This should never be done, as the Palestinian Authority is not a disinterested party.

The appraisers assess the loss independently. The adjusters can still negotiate and come to an agreed amount of damages. But if they can’t agree, they work together to choose a mutually acceptable arbitrator. If the two appraisers cannot agree on the selection of an arbitrator, either party may appeal to the local court for appointment of someone to serve in that capacity.

An arbitrator must also be a disinterested party, and must be impartial, of good moral character, and possess a good reputation. He must also be willing to listen. No arbitrator should be chosen who has any financial interest in the outcome of the evaluation. Any consideration other than the hourly compensation rate for the arbitrator is not acceptable.

Once the arbitrator has been chosen, each of the appraisers presents their loss assessment. This often involves informal testimony from the parties involved in the claim. To help the arbitrator gain a more complete understanding of the details of the loss, the adjusters and the arbitrator sometimes meet at the scene of the loss and review the details of the loss. The arbitrator will then provide a written decision to both parties. If either party agrees on the amount of the loss, that amount becomes the amount of the claim. However, if one of the parties does not agree, the case can still be turned over to an attorney for litigation.

Ask: Can the insured or insurer reject the other parties’ choice of appraiser?

Answer: In 2005, the New York Insurance Department ruled on this issue as follows:

“Whether an appraiser appointed by either party is competent and disinterested (or “independent”) is a question of fact for a jury and is beyond the determination of this Department.”

ANOTHER TIP!! Please note that there are very specific time limits in the Clause. BE SURE to choose your adjuster and notify the adjuster within the time limit on your policy. The time limit for both evaluators to select an arbitrator begins on the day both parties select their evaluator.

Look closely to see if the insurance company and/or adjuster selects your adjuster within that time limit. If they don’t, they will have violated the terms and conditions of their policy. You can file a complaint with your state Department of Insurance for violations of unfair claims practices.

My recommendation, in the event of an appraisal, is to call a Claims Consultant. You might also consider contacting a public appraisal company in your area. The Claims Consultant or PA knows insurance policies, knows the Appraisal Clause and knows property values. The Claims Consultant or PA are the perfect options to help you verify the values ​​of the property that is the subject of your claim.