Appraisal clauses and the umpire’s role within them have a long history in property insurance, and courts in many states have weighed in over the years on how this process should generally be treated.
A common theme across many court decisions is that appraisal clauses serve a useful purpose: providing a faster, less expensive alternative to litigation for resolving disagreements specifically about the dollar amount of a covered loss.
Many courts have shown a general preference for enforcing appraisal awards once properly reached, rather than allowing either party to simply relitigate the value of the loss after going through the appraisal process. This reflects respect for the process both parties agreed to under the policy.
At the same time, courts have generally recognized limits on the appraisal process, such as confirming that appraisal is meant to resolve amount of loss disputes specifically, not broader coverage questions about whether a claim should be paid at all.
Because appraisal is a matter of state contract and insurance law, how courts have treated specific issues, such as the standard for challenging an award or the exact scope of an umpire’s authority, can vary meaningfully from state to state, so general trends should not be treated as a substitute for advice specific to your jurisdiction.
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.