The value of the appraisal process depends heavily on the umpire actually being neutral, not just described that way on paper. Several practical safeguards, built into typical policy language and standard practice, help maintain that impartiality.
The competent and disinterested standard found in most appraisal clauses is the starting point. This generally means the umpire should not have a financial or personal relationship with either party that could reasonably affect their judgment about the loss.
Because the umpire is usually chosen jointly by the two appraisers, rather than by only one side, the selection process itself is designed to produce someone acceptable to both the policyholder and the insurer’s representatives.
An umpire compensation arrangement is typically structured as a flat or hourly fee for the work performed, shared between both parties, rather than being tied in any way to the size of the final award. This helps remove any incentive to favor a larger or smaller number.
Umpires also generally review documentation and positions from both appraisers before forming a conclusion, rather than relying on information from only one side, which supports a more balanced evaluation of the disputed amount.
If either party has genuine concerns about a specific umpire’s neutrality in their case, those concerns are best raised early, ideally before the umpire is formally agreed to, and can also be discussed with an attorney familiar with the applicable state’s rules.
This article is general education about how the appraisal process commonly works. It is not legal advice, and specific procedures can vary by state and policy. If you have questions about your own claim, review your policy language and talk with your insurance company, agent, or an attorney familiar with your state’s laws.
Russ Lis is a working property insurance appraiser and umpire based in Minnesota, serving clients nationwide. Have a question about your own claim? Contact Appraisal Resolution.