Appraisal Services

What is an Insurance Appraisal?

You are probably familiar with the term “appraisal” as it relates to getting a professional opinion on the value of real estate or personal property. However, most people are not familiar with the insurance appraisal process. When two parties are unable to agree on the amount of money an insurance company should pay to settle a claim, it is likely that there will be a nonjudicial means of resolving disputes between the insurance company and the insured. Assurance Advocacy Group works with the insurance company or homeowner through the dispute. 

 This process applies when you have sustained property damage and you need claims help or have a claim disagreement with your insurance company or the policy holder. An insurance appraisal can help you resolve the claim dispute. If a policyholder and the insurance company are in disagreement on the amount of loss or the scope of damages sustained during a claim settlement, you have an option to settle the claim by invoking an appraisal clause in the insurance policy.

Invoking an Appraisal Clause

The process of invoking an appraisal requires each party to;

  • pay its appointed appraiser
  • bear the other expenses of the appraisal and umpire equally

When there is a pricing dispute, an insurance appraisal may be a faster, lower-cost option available to settle a claim dispute. Invoking an appraisal can be an effective way to settle claim disputes without having to take the time and expense of litigation or insurance attorneys. The process of invoking an appraisal clause and its description are located in the Conditions section of most homeowners or business owners policies (BOP). Here is how it’s described in an ISO insurance HO-3 form, which is a typical homeowner’s policy:

 If you and we fail to agree on the amount of loss, either may demand an appraisal of the loss. In this event, each party will choose a competent and impartial appraiser within 20 days after receiving a written request from the other. The two appraisers will choose an umpire. If they cannot agree upon an umpire within 15 days, you or we may request that the choice be made by a judge of a court of record in the state where the “residence premises” is located. The appraisers will separately set the amount of loss. If the appraisers submit a written report of an agreement to us, the amount agreed upon will be 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 set the amount of loss.

The Process of Appraisal

 An insurance claim appraisal is a binding and contractual process available to settle valuation disputes between policyholders and their insurance companies when they fail to agree on the amount to be paid for an insurance claim. An insurance appraiser is a competent and disinterested professional who will evaluate the claim and value of the property or amount of the loss. An insurance appraiser can be an independent adjuster, contractor, engineer, or anyone else who is competent to value and determine the amount of loss. Here are a few things you should know about the appraisal process:

  •  Either the policyholder or the insurance company may initiate the appraisal clause
  • Usually done in writing
  • Each party must pick its own impartial appraiser
  • Disputes centering on coverage issues cannot be decided by appraisal
  • Prior to an appraisal an honest attempt to come to a consensus must be made

Once the appraisers are selected, they work together to select a competent, disinterested and impartial individual to serve as umpire. The umpire renders a binding decision when the two appraisers fail to agree on the value of property or the amount of a property loss. A qualified umpire is someone like a retired judge, engineer, contractor, independent adjuster, or anyone who can give an impartial valuation based on their expertise in the field.

Selecting the Right Appraiser is Crucial

 The key to a successful insurance appraisal is hiring an expert who knows the ins and outs of the process. Knowing who to choose as an umpire and how to agree to an impartial umpire is one of the most important factors for a successful appraisal. Also, it helps knowing how to negotiate and come to an agreement quickly with the other appraiser and umpire. When properly executed, insurance appraisal is a great tool for settling insurance claim disputes.


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