One of the most misunderstood provisions in your property insurance policy is the Appraisal clause. An appraisal is the process that takes place when your insurance company and you, the insured, cannot agree on the value of a loss. Appraisals are only used when trying to determine the value and extent of the damage. It is not used to determine whether there is coverage or the cause of a loss.
In appraisals, each party appoints its own appraiser. The appraiser is supposed to be a disinterested third party. The appraisers appraise the loss and attempt to reach a resolution on behalf of their clients. If they cannot agree, a third appraiser, called an umpire, makes the final determination.
First, you need to hire the correct appraiser. It is important to check the references, experience, and credentials of your appraiser. Your appraiser needs to be diligent and proactive. If your appraiser is reactive and passive, your case will not end well.
Second, you need to have input into the selection of the umpire. The policy will state that in the event the appraisers cannot agree on an umpire, either party can petition the Court to appoint an umpire. If you do not inject yourself into that process you will likely draw an umpire you don’t want.
If you are unprepared, the appraisal process strongly benefits the insurance company. Thus, it should be approached with great caution by the insured.
If you are going through the appraisal process, contact my law firm. It could make a huge difference.