Appraisal Services

There are no official requirements for these positions. There are Certification and Credential programs for Umpires and Appraisers. Still, their selection is primarily based on prior Umpire and Appraiser experience and their knowledge about the type of property damages in dispute. The use of appraisal to resolve insurance disputes has grown extensively.

Appraisal is a clause or option written into most commercial insurance policies.

Appraisal vs. Lawsuit

The Appraisal process:

1. Failure to agree as to the actual cash value or the amount of loss.

2. Upon written request of either, each party shall select a competent and disinterested appraiser and notify the other of the appraiser selected within 20 days.

3. The appraisers shall first select a competent and disinterested umpire.

4. Failing for 15 days to agree upon the umpire, the umpire shall be selected by a judge of a court of record in the state in which the property covered is located.

5. Appraisal proceedings are informal.

   1. No formal discovery shall be conducted, including depositions, interrogatories, requests for admission; other forms of formal civil discovery.
   2. No formal rules of evidence shall be applied.
   3. No court reporter shall be used for the proceedings.
   4. The appraisers shall then appraise the loss, stating separately:
      a) Actual cash value.
      b) Loss to each item.
   5.  Appraisers submit their differences only to the umpire.
   6.  An award in writing, itemized, of any two when filed with the insurance company shall determine the amount of actual cash value and loss.

The cost of the appraisal process, mediation, or arbitration is usually significantly lower than filing litigation in court, but the costs must be paid upfront and from your funds with no guarantee of the outcome. The cost is usually determined by the hours it takes the adjuster to inspect and write the report or based on the square footage of the home or business.

The fee that an appraiser charges you must be a set fee. This means that the appraiser can’t charge you based on the amount of the estimate or the amount of the claim settlement. They must be an “uninterested” third party and their fee can’t be based on the outcome of the settlement.

It is important to note that, should you go into “appraisal” for the cost of the repairs, you must spend the money for your appraiser and half the cost of the umpire out of your pocket, and that there are no guaranteed results.

Payment

• Each appraiser shall be paid by the party selecting him or her.

• Expenses of appraisal shall be paid by the parties equally.

• The Umpire shall be paid by the parties equally.

When hiring an appraiser for a claim, you want to make sure you use an adjuster or an appraiser for insurance claims. Public Adjusters are an excellent source for your appraisal needs. They tend to have vast experience in correctly assessing damages and considering city/code upgrades and hidden damages.

Your state board for insurance adjusters can be the right place to start, and most states also have an association of public adjusters that usually have very high standards and skillsets. The Insurance Appraisal and Umpire Association directory provides lists of certified professionals by state. There is also a National Association of Public Adjusters with a list of adjusters that are likely close to your home or business.

The appraisal language in your policy most likely requires that a demand for appraisal must be in writing. Usually, the language also addresses certain time limits for naming appraisers and umpires, how the appraisal is to be accomplished, who pays the costs of appraisal, and the appointment of an umpire.

The appraisal language in a policy typically reads as follows. You will need to find and hire an Appraiser to represent your case in the disburse of cost to repair or replace.

Appraisal. If you and we fail to agree on the actual cash value, amount of loss, or cost of repair or replacement, either 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.

When you and the insurance company disagree on the cost to repair or replace your damaged items, many insurance policies have what is called a “Mandatory Appraisal Clause”. This means that your right to file a lawsuit is delayed (or wholly denied) unless you first comply with your policy’s appraisal clause.

The appraisal goal is simple: the insurance company wants to make sure they know what they are paying for and that it is actually necessary for all of the charges to be paid so that you are fully indemnified for your loss.

The insurance company most often directs an insurance appraisal process. Once they notify you that they are not going to pay the amount you need to repair or replace your damaged items, they will usually notice that you must go through the appraisal process for any further payments to be released. In this situation, you must act quickly. You have 20 days to hire an appraiser and your appraiser should be submitting his/her choice for the umpire. If the insurance company and the policy holder are unable to agree upon an umpire, one will be appointed for the process.