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A property owner who calls an attorney about a stalled insurance claim is often looking for litigation, but litigation is not always the right first step, and experienced coverage counsel routinely evaluate whether the dispute is actually a valuation disagreement that the policy’s appraisal clause was built to resolve. Recognizing that distinction early can save the client significant time and expense, since appraisal typically resolves faster and at lower cost than a filed lawsuit, particularly in cases where coverage itself is not seriously contested.
The threshold question an attorney generally asks is whether the disagreement is about whether the loss is covered or about how much the covered loss is worth. If the carrier has denied the claim outright, disputes a policy exclusion, or questions whether a condition precedent was satisfied, appraisal is not the right tool, since appraisal panels have no authority to decide coverage questions and will typically decline to proceed, or a court will later find the award unenforceable, if the parties try to use appraisal to resolve what is really a coverage dispute. But if the carrier has accepted the claim and simply valued the repair scope or cost differently than the client’s contractor, appraisal is often squarely on point.
Attorneys who refer clients to appraisal generally continue to play a role even though they do not typically sit on the panel itself. Reviewing the appraisal clause language for any deadlines or procedural requirements, helping the client select a competent appraiser, and monitoring the process for any conduct that might later be relevant if the award is challenged are all common tasks. Some attorneys attend inspections or panel conferences as an observer, though the appraisers themselves, not counsel, drive the panel’s technical work. Counsel also frequently assists the client in gathering the documentation the appraiser will need, such as prior estimates, photographs, and any repair invoices, so the appraisal proceeds without unnecessary delay waiting on records the client could have supplied earlier.
There are practical reasons attorneys favor this path when it fits. Appraisal generally does not require formal discovery, depositions, or motion practice, which reduces legal fees substantially compared to litigation. It also tends to produce a resolution measured in months rather than years, which matters for clients who need repairs completed, particularly ahead of a Minnesota winter when unresolved roof or exterior damage can lead to further deterioration from ice and snow load. And because appraisal awards receive a presumption of validity in most jurisdictions, a well-conducted appraisal often produces a more durable resolution than a negotiated settlement reached under pressure to avoid litigation costs.
Attorneys also weigh timing considerations tied to the underlying policy and any applicable statute of limitations. Because invoking appraisal does not always toll every deadline relevant to a claim, counsel typically confirms what protections exist, and in some cases negotiates a tolling agreement with the carrier, before recommending that a client pursue appraisal rather than filing suit to preserve claims while the valuation dispute is worked through. This kind of upfront due diligence is part of what separates a well-managed referral to appraisal from one that later creates its own set of complications for the client.
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.