FAQs

QUESTIONS & ANSWERS

PLEASE BE ADVISED THE FOLLOWING ANSWERS TO COMMON QUESTIONS REGARDING THE APPRAISAL PROCESS SHOULD NOT BE CONSIDERED LEGAL ADVICE. THIS INFORMATION IS FOR GENERAL PURPOSES ONLY. THE INSURANCE POLICY AND ANY APPLICABLE STATE STATUTES GOVERN THE APPRAISAL PROCESS. IF YOU HAVE ANY SPECIFIC QUESTIONS, WE SUGGEST YOU CONSULT WITH AN ATTORNEY.

Appraisal Basics

What is insurance appraisal?

Insurance appraisal is a dispute resolution process built into the loss settlement section of most property insurance policies. It is used specifically to resolve disagreements over the dollar amount of a covered loss, not whether the loss is covered in the first place. Each side selects its own appraiser, and if those two appraisers cannot agree, a neutral umpire helps settle the difference. The goal is a fair and reasonable resolution without the time and expense of a lawsuit.

What does the appraisal clause in a homeowners policy actually say?

Most property policies include a clause stating that if the policyholder and insurer disagree on the amount of a loss, either party may demand appraisal. The clause typically outlines how appraisers are chosen, how an umpire is brought in if needed, and how costs are shared. The exact wording varies by insurer and by state, so it is worth reading your specific policy language closely or asking an attorney to review it.

When can appraisal be invoked in a property insurance claim?

Appraisal can generally be invoked once there is a genuine disagreement about how much a covered loss is worth, such as differing repair estimates or scope of damage. It is not meant to be used to argue about whether coverage applies at all. Either the policyholder or the insurer can typically demand appraisal, depending on the policy’s specific language and applicable state law.

Is appraisal the same thing as filing a lawsuit?

No, appraisal is a separate, generally faster and less formal process than litigation. It focuses narrowly on the amount of loss rather than broader legal claims, and it does not require attorneys, judges, or courtroom procedures, though either side may still choose to consult one. Appraisal and litigation can sometimes intersect, so understanding how your policy and state law treat the relationship between the two is important.

Does appraisal decide whether a claim is covered?

No. Appraisal is designed to resolve disputes over the amount of a covered loss, not questions of coverage such as whether a policy applies, whether an exclusion is triggered, or whether the claim was filed properly. Coverage disputes are typically handled separately, often through negotiation, litigation, or another process outside of appraisal. If coverage is in question, reviewing your policy or speaking with an attorney is generally the better first step.

Who can request appraisal, the policyholder or the insurance company?

Either party can generally invoke appraisal once a genuine dispute over the amount of loss exists, though the exact right depends on the specific policy language. Some policies allow either side to demand it, while state regulations can also shape who may initiate the process and when. Because appraisal is meant to be a neutral, two way tool, it is not exclusively available to just one side.

Is appraisal mandatory once it is written into the policy?

In many states, once a policy includes an appraisal clause, either party can require the other to participate if a dispute over the amount of loss arises. Whether appraisal is truly mandatory, and under what circumstances it can be waived or challenged, depends heavily on state law and the specific policy wording. If you are unsure whether appraisal applies to your situation, reviewing the policy language or consulting an attorney is recommended.

How is appraisal different from mediation or arbitration?

Mediation involves a neutral third party helping both sides negotiate their own resolution, while arbitration typically involves one decision maker issuing a binding ruling after hearing both sides. Appraisal is more narrowly focused, two party selected appraisers try to agree on the amount of loss, and only if they cannot agree does a neutral umpire step in. It is generally faster and less formal than arbitration and more structured than open ended mediation.

Why do insurance companies and policyholders both use appraisal?

Appraisal offers both sides a way to resolve a dollar amount dispute without the cost, delay, and adversarial nature of a lawsuit. It gives each party a voice through their own appraiser while relying on a neutral umpire to break any deadlock fairly. Because the process is built to be balanced rather than favor either side, many carriers and policyholders view it as a reasonable middle ground.

The Process and Timeline

How does the appraisal process actually work?

Once appraisal is invoked, each party selects and pays for its own appraiser to evaluate the loss. The two appraisers then attempt to agree on the amount of loss, and if they reach agreement, that becomes the binding figure. If they cannot agree, they select a neutral umpire, and agreement between any two of the three, whether both appraisers or one appraiser and the umpire, sets the final binding amount.

How long does the appraisal process usually take?

Timelines vary widely depending on the complexity of the damage, the responsiveness of both parties, and how quickly an umpire is selected if needed. A straightforward claim might resolve in a matter of weeks, while a large or complicated loss involving many components can take several months. Delays often come from scheduling inspections, gathering documentation, or disagreements over scope rather than the process itself.

What are the steps from invoking appraisal to reaching an award?

The process generally starts with one party formally demanding appraisal under the policy, followed by each side naming its own appraiser. Those appraisers inspect the damage, review documentation, and try to agree on the amount of loss. If they reach an impasse, they select a neutral umpire, and once any two of the three sign off on a figure, that becomes the binding appraisal award.

What should each side prepare before entering appraisal?

Both parties generally benefit from having a clear, itemized estimate of the disputed damage, along with supporting documentation such as photos, contractor bids, and any prior adjuster reports. It also helps to have a clear understanding of the specific policy provisions at issue and the scope of the disagreement. Being organized and reasonable going in tends to make the process smoother for everyone involved, including the appraisers and umpire.

Do the two appraisers ever meet in person?

Often, yes. Appraisers frequently conduct a joint inspection of the property to look at the damage together, discuss differences in their estimates, and try to reach agreement. In some cases, especially for straightforward claims or when travel is impractical, appraisers may work primarily through phone calls, video meetings, and written estimates instead.

What happens if the two appraisers cannot agree?

When the two party appointed appraisers reach an impasse, the next step is selecting a neutral umpire to help resolve the disagreement. The umpire reviews both appraisers’ positions and the underlying evidence, and a final amount is set once any two of the three, whether the umpire and one appraiser or both appraisers together, agree on a figure. This structure is designed to keep the outcome fair even when the original two cannot find common ground.

Can appraisal be paused or delayed, and what causes delays?

Yes, appraisal can be delayed by things like difficulty scheduling a joint inspection, disputes over selecting an umpire, incomplete documentation, or simply the size and complexity of the loss. Weather, contractor availability, and the responsiveness of each appraiser also play a role. Keeping communication timely and organized on both sides generally helps keep the process moving at a reasonable pace.

What documents are typically exchanged during appraisal?

Common documents include the original claim file, adjuster estimates, contractor bids, photographs, repair invoices, and any engineering or expert reports related to the damage. Appraisers may also request the relevant policy language to understand the scope of the loss settlement provision. Sharing complete and organized documentation helps both appraisers and the umpire reach a fair and well informed conclusion.

Costs and Payment

Who pays for the appraisal process?

Each party is generally responsible for paying its own appraiser’s fees. If an umpire becomes necessary, the cost of the umpire is typically split equally between the policyholder and the insurance company, though the exact arrangement can depend on the policy’s specific language.

How much does it typically cost to go through appraisal?

Costs vary based on the complexity of the claim, the size of the disputed amount, and how the appraisers charge for their time. Appraiser fees can be structured as hourly rates, flat fees, or a portion of the increase they help recover, and umpire fees are usually billed separately and split between the parties. Because costs can add up, it is often worth weighing the size of the dispute against the likely expense of appraisal before proceeding.

Is it worth paying for appraisal on a smaller claim?

Whether appraisal makes financial sense depends on how large the disputed amount is compared to the likely cost of the process. For a small dollar disagreement, appraisal fees could end up representing a significant portion of the disputed amount, while for larger disputes the cost is often a much smaller fraction. Reviewing the numbers honestly and considering less formal negotiation first can help determine if appraisal is a reasonable next step.

Does each party pay its own appraiser even if it is unhappy with the outcome?

Generally, yes. Appraiser fees are typically owed for the work performed regardless of the final award amount, similar to how you would pay any other professional for services rendered. It is worth discussing fee structure and expectations with your chosen appraiser before the process begins so there are no surprises later.

How are umpire fees typically split and billed?

Umpire fees are most commonly split evenly between the policyholder and the insurance company, reflecting the umpire’s neutral role in the process. Billing arrangements can vary, with some umpires invoicing each party directly and others invoicing through the appraisers. The specific split and payment method should be confirmed and agreed upon before the umpire begins work.

Can appraisal costs exceed the value of the disputed amount?

In rare cases involving small disputes or an unusually complex or drawn out process, yes, the combined cost of appraiser and umpire fees could approach or even exceed the value of the disagreement. This is one reason it is worth realistically estimating the likely cost before invoking appraisal, particularly for lower value claims.

Do insurance policies ever reimburse appraisal costs?

Typically, each party bears its own appraiser costs regardless of the outcome, and umpire costs are usually shared rather than reimbursed by one side to the other. Some policies may address cost allocation differently, so reviewing your specific policy language is the best way to understand what applies in your situation.

Are appraiser fees hourly, flat rate, or contingency based?

Appraiser fee structures vary by individual and by firm, and can include hourly billing, a flat fee for the engagement, or a fee tied to the increase in the settlement. Each structure has different incentives, so it is reasonable to ask an appraiser directly how they bill before hiring them.

Appraisers and Umpires

What qualifications should an appraiser have?

A good appraiser generally has hands on experience estimating property damage and repair costs, familiarity with insurance policy language, and a track record of fair, well documented work. Many appraisers come from backgrounds in construction, contracting, or claims adjusting. Because there is no single national licensing standard for appraisers, it is reasonable to ask about their experience, references, and approach before hiring one.

What does an umpire do in the appraisal process?

The umpire acts as a neutral third decision maker who steps in only when the two party appointed appraisers cannot agree on the amount of loss. The umpire reviews the evidence, may inspect the property, and works to reach a fair and reasonable figure. Once the umpire agrees with either appraiser, that shared figure becomes the binding appraisal award.

How is an umpire selected if the two appraisers disagree?

The two appraisers typically try to agree on an umpire themselves, often from a list of qualified candidates. If they cannot agree, many policies provide for a court, or in some cases another named authority, to appoint the umpire instead. The exact method depends on the specific policy language and applicable state law.

Can an appraiser also act as an advocate for the party that hired them?

Appraisers are hired and paid by one party, so it is normal for them to advocate reasonably for that party’s position based on the evidence. That said, a credible appraiser should still base estimates on sound methodology and factual damage assessment rather than simply inflating or minimizing numbers. Neutrality is expected primarily from the umpire, while appraisers are expected to be honest and fact based even while representing their side.

Is the umpire required to be neutral and unbiased?

Yes, the umpire’s core role is to be impartial and to weigh both appraisers’ positions fairly before reaching a decision. Neutrality is central to why the appraisal process works, since the umpire’s independence is what allows a fair resolution when the two appraisers cannot agree on their own.

Can either party reject or challenge an umpire?

Parties can typically raise concerns about a proposed umpire’s neutrality, qualifications, or conflicts of interest before that umpire is formally appointed. Once an umpire has been properly selected and has issued a decision, challenging that decision afterward is generally more difficult and depends on state law and the specific circumstances. If you have concerns about a potential umpire, raising them early and, if needed, discussing them with an attorney is generally the better approach.

Do appraisers and umpires need to be licensed adjusters?

Requirements vary significantly by state and by policy language, and many states do not require appraisers or umpires to hold an adjuster license at all. What generally matters more is relevant experience with property damage estimation and a fair, methodical approach to the work. Checking your state’s specific rules and your policy’s requirements is a good idea if you are choosing an appraiser or umpire.

Can each party choose its own appraiser, or does the other party have to approve the choice?

Each party generally has the right to select its own appraiser without needing the other side’s approval, since the process is built around each side having independent representation. The appraiser does not need to be pre approved by the opposing party, though they should be competent, disinterested in the outcome beyond their fee, and capable of a fair assessment.

What happens if an appraiser is found to be biased?

If an appraiser’s conduct raises serious concerns about bias or lack of good faith, it can potentially affect the validity of the process or the resulting award, depending on state law and the specific facts involved. These situations are relatively uncommon but can become legal questions, so consulting an attorney is generally advisable if you believe an appraiser or umpire acted improperly.

Types of Claims

What types of property claims commonly go through appraisal?

Appraisal is most commonly used for disputes over the value of damage from events like storms, fire, water intrusion, and other sudden property losses on both residential and commercial policies. It applies whenever there is a genuine disagreement about the dollar amount of a covered loss rather than whether coverage exists.

Can appraisal be used for wind and hail damage claims?

Yes, wind and hail damage disputes, particularly involving roofing, siding, and other exterior components, are among the most common reasons appraisal is invoked. Disagreements often center on the extent of damage, whether certain areas need full replacement versus repair, and differing cost estimates between the parties.

What are common reasons weather related claims get denied or disputed?

Weather claims are often disputed or denied due to disagreements over whether damage is storm related versus pre existing wear, differing opinions on the scope of repairs needed, or questions about whether damage meets a policy’s specific thresholds. Documentation gaps and mismatched estimates between the insurer’s adjuster and the policyholder’s contractor are also common sources of disagreement. When the dispute is specifically about the dollar amount of covered damage, rather than whether the claim is covered at all, appraisal may be a reasonable path forward.

Is appraisal available for fire and smoke damage disputes?

Yes, fire and smoke damage claims can go through appraisal when the disagreement is about the value or scope of the loss, such as the cost to repair smoke damaged surfaces or replace fire damaged structures and contents. As with any claim type, appraisal addresses the amount of loss, not whether the fire damage itself is a covered event.

Can water damage and pipe burst claims go through appraisal?

Yes, disputes over the amount owed for water damage, including sudden pipe bursts, are commonly resolved through appraisal. These claims can be complex because they often involve questions about how far water traveled and the reasonable cost of drying, repair, and replacement.

Does appraisal apply to commercial property claims as well as homes?

Yes, many commercial property policies include appraisal clauses similar to those in homeowners policies, and appraisal is regularly used to resolve amount of loss disputes on commercial buildings, contents, and related coverages. The general structure of the process is similar, though commercial claims can involve more complex documentation and larger dollar amounts.

Can appraisal be used for business interruption or loss of use claims?

It depends on the specific policy language, since some policies extend appraisal to business interruption or loss of use figures while others limit appraisal to physical property damage. Because these claims often involve financial calculations rather than straightforward repair costs, reviewing your policy’s appraisal clause carefully, or asking an attorney to review it, is a reasonable step before assuming appraisal applies.

Is appraisal appropriate for total loss claims?

Appraisal can be used for total loss claims when the dispute is over the value of the loss, such as the replacement cost or actual cash value of a destroyed structure or its contents. As with other claim types, appraisal addresses the dollar amount rather than the underlying question of whether the loss is covered.

Outcomes and Awards

What does a final appraisal award actually look like?

A final appraisal award is typically a signed written document stating the agreed amount of loss, often broken down by category such as structure, contents, or additional living expenses. It is signed by any two of the three participants, whether both appraisers or one appraiser and the umpire, which is what makes the figure binding under the process.

Is the appraisal award legally binding on both parties?

In most cases, yes, once any two of the three participants agree and sign the award, it becomes binding on both the policyholder and the insurance company under the terms of the policy. There can be limited exceptions depending on state law, such as evidence of fraud or serious misconduct in how the process was conducted, so reviewing your policy or speaking with an attorney is the best way to understand your specific rights.

What commonly gets overlooked during the appraisal process?

Parties sometimes overlook the difference between amount of loss and coverage questions, mistakenly trying to argue coverage issues through appraisal when those belong elsewhere. Detailed items like code upgrade costs, matching requirements for materials, or overhead and profit calculations can also get missed if documentation is incomplete. Careful, thorough preparation from both sides helps ensure the appraisal award reflects a fair and complete picture of the loss.

Can an appraisal award be appealed or challenged in court?

Appraisal awards are generally difficult to overturn once properly reached, since courts tend to give them significant deference as long as the process was conducted fairly and in good faith. Challenges are typically limited to specific grounds such as fraud, corruption, or a clear failure to follow the agreed process, and these standards vary by state. If you believe an award was reached improperly, consulting an attorney is the appropriate next step.

Does the appraisal award guarantee payment from the insurance company?

The appraisal award sets the binding amount of the covered loss, but payment still depends on the terms of the policy, including any applicable deductibles, prior payments, and coverage limits. In most cases, once the amount is set through appraisal, the insurer is expected to pay the amount owed under the policy in a timely manner.

What happens if one appraiser refuses to sign the final award?

The appraisal process is designed so that agreement between any two of the three participants, not necessarily all three, is enough to create a binding award. If one appraiser disagrees, the award can still stand as long as the umpire and the other appraiser agree on the figure.

Can appraisal result in a lower amount than the insurer’s original offer?

Yes, appraisal is a neutral process and its outcome is not guaranteed to favor either side. Because two independent appraisers and, if needed, a neutral umpire assess the loss on its merits, the final figure could end up higher, lower, or the same as any prior offer, which reflects the fairness built into the process rather than an outcome favoring one party.

Does agreeing to appraisal mean giving up other legal rights?

Appraisal specifically resolves the amount of a covered loss and generally does not waive other rights related to coverage disputes or bad faith claims, though the exact effect depends on your policy and state law. Because legal rights can be affected differently depending on your circumstances, reviewing your policy language or consulting an attorney before invoking or agreeing to appraisal is a reasonable precaution.