​1. Invoking the Appraisal Clause

• The appraisal process is an alternative dispute resolution method outlined in the insurance policy's loss settlement section. 

• It's used when the insurer and policyholder disagree on the amount of loss or value of the insured property. 

• The policy typically includes an appraisal clause that outlines the process. 

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2. Selecting Appraisers:

• Independent Selection:  Each party (the insurer and the policyholder) selects their own competent and impartial appraiser.

• Appraiser Qualifications:  Appraisers can be adjusters, contractors, engineers, or anyone else who is competent to determine the amount of loss. 

 

3. Appraisers Agree on an Umpire:

• Neutral Third Party:  The appraisers work together to select a competent, disinterested, and impartial individual to serve as an umpire. 

• Umpire's Role:  The umpire renders a binding decision if the two appraisers cannot reach an agreement on the value of the property or the amount of loss. 

• Umpire Selection:  If the appraisers cannot agree on an umpire, a court having jurisdiction over the matter will select one. 

 

4. Inspection and Evaluation:

• Independent Assessments:  Each appraiser inspects the damaged property, assesses the loss, and determines the value of the claim based on their expertise and the policy terms.

• Information Exchange:  Both appraisers exchange their findings and evaluations and discuss any differences. 

 

5. Final Appraisal Amount:

• Binding Decision:  The appraisal process concludes when the final appraisal amount is determined, and it is binding on both parties.

• Dispute Resolution:  If either party disputes the final appraisal amount, legal options such as pursuing a lawsuit or arbitration are available