Common Questions
Frequently Asked Questions
Appraisal is a policy provision found in the Loss Settlement section of an insurance policy that serves as an alternate dispute resolution for policyholders and insurance carriers. Insurance claim appraisers and property appraisers differ in that property appraisers don’t deal with the value of insurance claims. Appraisers do not argue coverage within the policy and only estimate property damage. A typical Appraisal clause is worded as so:
“If you and we fail to agree on the actual cash value, amount of loss, or cost of repair or replacement, either the policyholder or insurance company can make a written demand for appraisal. Each will then select a competent, independent, appraiser and notify the other of the appraiser's identity within 20 days of receipt of the written demand. 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 district court of a judicial district where the loss occurred. The two appraisers will then set the amount of loss, stating separately the actual cash value and loss to each item.”
It is an option for policyholders who disagree with the insurer's estimate of a property damage claim value. The process of appraisal involves both parties hiring their own insurance appraisers to determine the value of the loss. It serves as a binding contractual process and a more expedient alternative to filing a lawsuit. It is not designed to address coverage issues, but may include or exclude items based on causation depending on the state. The Insurance Appraisal process involves a panel of three participants: the insurance company's appraiser, the policyholder's appraiser, and an umpire who serves as the final decision maker. If the appraisers disagree the umpire rules on the amount of the loss and/or scope of work, but does not have the authority to make decisions as to coverage within the policy.
- Claim Status:
Claim is barely or partially paid by the insurance carrier. - Policy Verification:
Confirm the insurance policy includes an Appraisal Clause. - Appraiser Documentation:
Provide the insured with Insurance Appraiser documentation outlining rights and process. - Engagement of Appraiser:
The insured hires an Insurance Appraiser and pays the initial retainer. - Appraiser Assignment:
The Insurance Appraiser is formally assigned via an Engagement Letter. - Appraisal Demand:
The insured’s appraiser demands or invokes appraisal under the policy’s Appraisal Clause. - Carrier’s Appraiser Selection:
The insurance company names their appraiser (typically within 2–3 weeks). - Umpire Agreement:
Both appraisers agree on a neutral Umpire (usually within 1–4 weeks). - Property Inspection:
The two appraisers visit the property together to review the loss. - Estimate Exchange:
Each appraiser prepares and exchanges estimates for comparison and negotiation. - Disagreement Resolution:
If the appraisers cannot agree, they submit the dispute to the Umpire. - Appraisal Award:
The Umpire issues a final award — must be signed by at least two of the three participants (either both appraisers or one appraiser and the umpire). - Final Fees:
The final appraisal fees are paid to the appraisers and umpire as applicable. - Award Submission:
The signed award is submitted to the carrier for payment (typically 1–2 weeks processing). - Carrier Payment:
The insurance company issues payment for the awarded amount (usually within 1–2 weeks).
- Appraisal Request Form
The customer completes the Appraisal Request Form to begin the process. - Initial Consultation & Pricing
Elite contacts the customer to review the loss, explain the appraisal process, and confirm pricing. - Retainer Collection
The retainer fee is collected to initiate the appraisal file. - Document Submission
The customer (or representative) uploads all relevant materials, including:- Adjuster’s estimates
- Legible floor plans or drawings
- Photos
- Specialty or contractor bids
- File Review
Elite reviews the file to ensure all necessary documentation and data have been received. - Appraiser Assignment
An Insurance Appraiser is officially assigned once the Engagement Letter is signed and returned (uploaded or emailed). - Initial Fee Payment
The initial appraisal fee is paid online prior to the start of the assessment. - Property Assessment & Estimate Preparation
The assigned appraiser visits the property, evaluates the loss, and prepares a detailed estimate. - Appraisal Invocation
The appraisal is formally demanded or invoked under the policy’s Appraisal Clause. - Remaining Steps
The process continues following the Typical Appraisal Steps outlined above (beginning with Step 7).
The best Insurance Appraisers are well versed in damage assessment and estimating. Adjusters and restoration contractors with Xactimate 3 Certification or similar with appropriate experience, in depth understanding of the appraisal process, and knowledge of the type of loss being appraised make the best appraisers. For most states there is no certification for appraisal; however, some do require a certification at the state level.
Usually, the two appraisers can reconcile their differences and reach an agreement on the loss amount. Should they fail to agree, they will defer to the umpire. Acting as an unofficial arbitrator, the umpire resolves any disputes between the appraisers. The majority of insurance policies stipulate that the loss amount will be determined by the decision of two out of the three members comprising the appraisal panel.
If the Insurance Appraisers disagree on the umpire selection the matter is submitted before a county judge who decides. In this instance each side will hire a knowledgeable attorney and each one will submit their list to the judge and make arguments for their perspective umpires. It is not uncommon for a judge to select someone disinterested who is not from either list such as a judge, arbitrator, mediator, or an attorney.
