Appraisal is a useful tool for resolving many property insurance disputes, but it is not the right fit for every situation. Understanding its limits can help avoid pursuing the wrong process for a given disagreement.
Appraisal generally applies only to disputes over the dollar amount of a covered loss. If the actual disagreement is about whether coverage exists at all, appraisal is typically not the appropriate process, since that is a coverage question rather than a valuation question.
Disputes involving allegations of bad faith, fraud, or other legal claims beyond a simple valuation disagreement generally fall outside what appraisal is designed to address and may require a different path, such as litigation.
In some cases, both parties may prefer to continue direct negotiation, particularly if the gap between positions is relatively small and a resolution seems achievable without a formal structured process.
Because appraisal is just one of several tools available for resolving property insurance disputes, whether it is the right option for a specific situation is worth discussing with your insurance company, agent, or an attorney familiar with your policy and your state’s rules.
This article is general education, not legal advice, and rules can vary significantly by state and by policy. If you have questions about your own claim or your legal options, 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.