In some cases, there may be a disagreement regarding your insurance company’s valuation of your claim for loss. Appraisal is yet another method of Alternative Dispute Resolution that you may find in your homeowners insurance policy. The language in your policy may state that either you or your insurer can ask for an appraisal. When an appraisal is properly executed, it is generally binding on both parties, but only as to the amount of loss. When the appraisal clause in homeowners insurance is implemented, the appraisal process must be properly employed, or it would not be binding. For this reason, it is extremely important that a qualified appraiser is chosen.
If you have reached the point where you are considering implementing the appraisal clause in your homeowners policy, it could be beneficial to speak to a knowledgeable attorney from Gulf Coast Insurance Attorneys. We can carefully look at the situation and the facts, then help you determine whether an appraisal would help you get the money you are owed for your claim—or whether there may be another way that would work better and more quickly. No matter what your issue stemming from an insurance company that does not want to pay you what your claim is worth, is delaying your payment, or has denied your payment altogether, we will aggressively pursue relief on your behalf.
How is an Appraisal Clause in Homeowners Insurance Worded?
While the wording may vary from policy to policy, and company to company, the clause may begin by saying that if you and the insurer cannot agree on the actual cash value, the amount of loss, or the cost of repair or replacement either you or the insurer can make a written demand for an appraisal. When this happens, both parties will then select an independent appraiser, notifying the other within 20 days. The two appraisers will then choose an “umpire” within 15 days.
If the two appraisers are unable to agree on an umpire, you or the insurer can request that a district court judge in the district where the loss occurred, will choose an umpire. The two appraisers will attempt to come to an agreement regarding the amount of the loss. If the two appraisers simply cannot agree, the umpire, after looking at the appraisers’ differences, will make the decision—and that decision is binding. Each party will be required to pay its own appraiser. Each party will split other expenses related to the appraisal, as well as the expense for the umpire. Since the stakes of an appraisal are high, working with an experienced attorney who is knowledgeable in choosing an appraiser is definitely the best course of action.
Appraisals Can Come with Additional Difficulties
In some cases, the umpire, who is supposed to be neutral, may not be. This means the umpire might side with an appraiser based on any reason other than because the appraiser properly appraised the loss. If the appraisal happens to end in your claim being significantly reduced, there is very little you can do about the decision. The appraisal is a binding process, yet as the policyholder, you might want to engage in further negotiations with your insurer in order to reach a compromise you are both satisfied with. Once an appraisal is complete, your negotiation ability is significantly limited.
It is important that you understand that an appraisal is not the same thing as arbitration. The goal of appraisal is to provide a simple, quick method of determining the amount of loss. Appraisal clauses were traditionally added into homeowner’s policies primarily for the benefit of the insurer. The insurer is not allowed, however, to use the appraisal clause in bad faith or in an oppressive manner. Appraisers and umpires usually have no authority to determine liability, coverage, or cause of a loss. They are only determining the amount of the loss, nothing more.
While not generally addressed within the policy, different states set the time allowed for an appraisal demand. If you or the insurer fails to demand an appraisal within a timely manner, an appraisal can be waived. An appraisal demand must be properly invoked, as well. Each side must find its own appraiser, and the appraiser must be a trained professional. An acceptance of proof of loss waives appraisal. An insurer that demands appraisal, yet fails to participate any further, waives the appraisal process.
How Gulf Coast Insurance Attorneys, Can Help You with Your Insurance Claim Dispute
At Gulf Coast Insurance Attorneys, we have significant experience representing policyholders in a wide range of insurance-related disputes. These disputes may involve property insurance claims and appraisal conflicts. We are highly skilled at navigating the challenges unique to appraisal disputes as well as many other challenges associated with a homeowner’s claim. Contact Gulf Coast Insurance Attorneys, today.