Browse the full Resources Index
Disclosure is one of the more concrete ways an appraiser’s neutrality gets tested in practice, since a relationship or financial interest that goes unmentioned can undermine confidence in an award even when the underlying number was reached fairly. The categories worth disclosing tend to fall into a few recurring types: prior business relationships with one of the parties or their counsel, repeat appointments by the same insurer or the same public adjuster over a period of years, any direct or indirect financial interest in the outcome, and any personal or family relationship with someone connected to the claim.
Repeat business is probably the most discussed of these categories because it is common and not inherently disqualifying, yet it raises a legitimate question worth naming openly. An appraiser or umpire who receives frequent appointments from the same insurance company, or frequent nominations from the same public adjusting firm, has an ongoing professional relationship that a reasonable person might want to know about before agreeing to that appraiser’s selection. Disclosing the frequency and nature of that relationship, rather than waiting to be asked, tends to preempt disputes about it later and lets the parties make an informed decision about whether to object before the assignment moves forward.
Industry groups involved in appraisal and umpire work, including regional organizations that maintain umpire panels and windstorm-focused professional networks, have increasingly encouraged or required disclosure statements as part of accepting an assignment. These statements typically ask the appraiser to affirmatively state whether they have any relationship with the parties, their attorneys, or their representatives that a reasonable person might consider relevant, and to update that disclosure if circumstances change during the assignment. Some appraisal clauses and some state regulations governing umpires build a disclosure requirement directly into the selection process itself, sometimes requiring a written statement before the umpire is formally confirmed, and some jurisdictions have gone further by licensing or registering umpires and appraisers directly, with disclosure obligations written into the licensing rules rather than left to industry custom alone.
Financial interest can take subtler forms than an obvious ownership stake in one of the parties. An appraiser who also performs contracting or estimating work in the same market, for instance, might have an indirect interest in how repair pricing trends are perceived generally, even without any direct connection to the specific claim at hand. Thoughtful appraisers tend to consider these more indirect interests as carefully as the obvious ones, since a conflict does not need to be financially significant to be worth mentioning; the standard many apply is simply whether a reasonable person, knowing the full picture, would want the information before accepting the appraiser’s neutrality at face value.
Courts reviewing challenges to appraisal awards have sometimes looked closely at whether a conflict existed and whether it was disclosed, and an undisclosed conflict, even one that did not actually affect the outcome, can be enough to draw a court’s scrutiny toward the entire award. Appraisers who treat disclosure as a routine first step, addressed before any inspection begins rather than only if someone raises a question, tend to avoid the harder position of explaining after the fact why something relevant was left unsaid.
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.
Russ Lis is a working property insurance appraiser and umpire based in Minnesota, serving clients nationwide. Contact Appraisal Resolution.