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One of the most common hurdles encountered in property insurance claims, is the pursuit of arriving at an agreed scope of damages, and the costs associated with the necessary repairs or replacement of damage property.
When policyholders and insurance companies disagree on the cost of repairing or replacing damaged property, it is incredibly frustrating for policyholder. Often time’s policyholders feel they have no choice but to settle for the amount offered by the insurance company. Most policyholders never realize that they have the right and ability to challenge an insurance company’s proposed settlement amount.
One way for policyholders to dispute their insurance company’s settlement offer, or damage assessment is to invoke the appraisal provision, which is the dispute mechanism, contained within most property insurance policies.
The common Appraisal Clause, contained within a property insurance policy may contain the following language and is a good general explanation of how appraisal works:
Appraisal
“If we and you disagree on the value of the property or the amount of loss, either may make written demand for appraisal of the loss. In this event, each party will select a competent and impartial appraiser. The two appraisers will select an umpire. If they cannot agree, either may request the selection be made by a just of a court having jurisdiction. The appraiser will state separately the value of property and amount of loss. If they fail to agree, they will submit their differences to the umpire. A decision agreed to by any two will be binding.”
The appraisal Clause is commonly regarded amongst Public Adjuster’s and property and casualty litigation attorney’s as the most empowering tool a policyholder has to arrive at the accurate and fair settlement of their property loss. When executed properly the appraisal process eliminates common insurance company tactics used to settle claims below fair market pricing. When conducted properly, appraisal is the most effective, and cost effective alternative to litigation.
It’s important for policyholders who are considering demanding an appraisal of their property insurance claim, to carefully evaluate potential appraisers of their loss. As appraisal continues to become a more and more common dispute resolution method, there is no shortage of people performing appraisals. But not all appraisers are created equal. A good appraiser must be well a versed expert in specifics applicable to the claim in question, including; forensic damage assessment, finance, building construction, negotiations and most importantly polciy language. It is important for insured’s to carefully evaluate, interview and check the appraisal history of a potential appraiser of their loss. With a qualified appraiser, and the proper execution of the appraisal process by a qualified and impartial panel of experts, the appraisal process remains the most effective and fair method for all parties involved, to reach a fair and accurate assessment and settlement of the amount of loss of a claim.
Not all insurance policies contain an appraisal clause, and some states do not allow appraisal. It is important to understand the appraisal requirements and allowances for this process within the policy, as well as state requirements.
Policyholder’s should consider and interview a few reputable appraisers, when considering them for selection as their appraiser. Public Adjuster’s, Insurance Litigation Attorney’s and insurance trade associations both locally and nationally, are a great resource for obtaining referrals of qualified and neutral appraisers when evaluating this process.