The Appraisal Clause Process
CLAIMS WITH YOUR OWN INSURANCE COMPANY
Most insurance policies have what’s called “right to appraisal” clause. Appraisal is used to dispute disagreements in the amount of the loss between you and your insurance company. The appraisal clause can be invoked by either party. The appraisal clause can be utilised when there is a dispute over the cost to repair your vehicle, the value of your vehicle when your vehicle is declared to be a total loss or the diminished value of your vehicle if you reside in a state where you can make a 1st party claim for diminished value. The appraisal clause is generally found in the “Damage to Your Auto” section of your insurance policy.
Below is a guide for the basic steps involved to demand your “right to appraisal” found in most insurance policies. When properly executed, insurance appraisal is a great tool for settling insurance claim disputes. Before invoking appraisal, you need to have an experienced expert on your side who understands the process, otherwise the insurance company will very likely have the advantage. If not properly executed, an appraisal can compound claim problems and result in costly delays.
STEP 1: INVOKING YOUR APPRAISAL CLAUSE
Send written correspondence to your insurance company informing them that as a result of your inability to reach a mutually agreeable settlement, you are invoking the appraisal clause of your insurance policy. Email is considered to be acceptable however you may need to follow up by sending a letter by certified mail/return receipt requested to be safe as some insurers will ignore you if not sent by certified mail.
STEP 2: SELECTION OF APPRAISERS
Most insurance policies state that each side will select a competent appraiser to assess the amount of the loss. Each side will be responsible for paying their chosen appraiser and share in other appraisal expenses. You should select an appraiser who is a subject matter expert in the specific area that is the subject of the dispute and who is familiar with the appraisal clause process. The appraiser you select should not act as an appraiser for the insurance company with whom you are having the dispute, or they will likely be concerned about repercussions from the insurer if they get a ruling against the insurer that is favorable towards the policy holder.
STEP 3: THE APPRAISAL PROCESS
Your selected appraiser as well as the appraiser selected by your insurance company will each independently appraise the loss. The two appraisers will then communicate and discuss their findings. During this process, the two appraisers attempt to reach a mutually agreeable settlement amount. Some policies require a selection of a 3rd party “umpire” to settle any differences be selected at this time. Some policies only require the umpire selection once the two appraisers fail to agree on a settlement.
STEP 4: PETITIONING AN UMPIRE
If the two appraisers are unable to reach an agreement in the amount of the loss, then the two appraisers petition the third-party Umpire who will review the positions and documentation of the two primary appraisers. If an umpire becomes necessary, you and your insurance company will each pay half of the cost of the umpire. An amount agreed upon by any two of the three parties is generally binding and determines the amount of the loss.
STEP 5: RECEIVING THE SETTLEMENT
Submit the written appraisal award to your insurance company and receive payment for the amount agreed to in the appraisal process. In Washington, your insurer must pay the award within 15 days.