It is the job of an appraiser to assess and evaluate the damage and provide an impartial, informed estimate of the value of the loss. The policyholder and the insurance company both will have their own independent appraiser assess the damage, and if the two appraisers cannot agree then a third appraiser will be used to resolve the differences. The third appraiser is called an umpire and is either agreed between the appraisers or appointed by a court having jurisdiction. Appraisal boils down to an agreement of two of the three appraisers.
What is the appraisal process?
The appraisal process is fairly simple. If the insurance company and the insured do not agree on the amount of a covered loss, either may demand an appraisal.
A typical policy appraisal clause states:
“If you and we disagree on the amount of loss, either may make written demand for an appraisal of the loss. In this event each party will select a competent and impartial appraiser and notify the other of the appraiser selected within 20 days of such demand. The two appraisers will select an umpire. If they cannot agree within 15 days upon such umpire, either may request that selection be made by a judge of a court having jurisdiction. Each appraiser will state the 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 as the amount of loss.”
The appraisal clause is designed to establish a cost-effective means to allow disputed amounts to be resolved by disinterested parties. Each party then selects their own appraiser and the selected appraisers perform their own independent evaluation. From this point, the principals are not involved in the dispute because each appraiser must independently access the loss and reach an agreement as to the amount of damage.
What is the appraisal process?
The appraisal process is fairly simple. If the insurance company and the insured do not agree on the amount of a covered loss, either may demand an appraisal.
A typical policy appraisal clause states:
“If you and we disagree on the amount of loss, either may make written demand for an appraisal of the loss. In this event each party will select a competent and impartial appraiser and notify the other of the appraiser selected within 20 days of such demand. The two appraisers will select an umpire. If they cannot agree within 15 days upon such umpire, either may request that selection be made by a judge of a court having jurisdiction. Each appraiser will state the 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 as the amount of loss.”
The appraisal clause is designed to establish a cost-effective means to allow disputed amounts to be resolved by disinterested parties. Each party then selects their own appraiser and the selected appraisers perform their own independent evaluation. From this point, the principals are not involved in the dispute because each appraiser must independently access the loss and reach an agreement as to the amount of damage.
