The Appraisal Clause
Did you know your property insurance policy likely contains an appraisal clause? Did you know this clause can assist you in resolving an insurance claim?
The appraisal process involves estimating or setting a value on a property loss. The process is informal and conducted without a court’s involvement. Appraisal clauses normally provide that either party to the insurance contract (the insurer or the policyholder) may demand an appraisal; each party selects an appraiser; the appraisers select an independent umpire, or an umpire is appointed by a judge if the appraisers cannot agree on an umpire; and the appraisers estimate the value of the loss. If the appraisers cannot reach an agreement on elements of loss, the umpire has the authority to make the decision.
For example, if you believe your damages to your home were $80,000 and your insurance company believes your damages to your home were $20,000, you can demand appraisal under the appraisal clause. You will pick an appraiser, the insurance company will pick an appraiser and together they will select an umpire. This three-party panel will then value the damages to your home in an effort to resolve your claim.
If you would like further information on the appraisal clause, if you need assistance invoking the appraisal clause, or if you need assistance selecting an appraiser, please contact us.