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Statutes of limitations do not pause automatically just because two parties have agreed to work through the appraisal process, and attorneys handling property claims need to think carefully about how the clock is running while a valuation dispute moves through a panel that can sometimes take several months to reach an award. Missing a filing deadline because appraisal took longer than expected is an entirely avoidable problem, and the tolling agreement exists specifically to prevent it.
A tolling agreement is a contract between the policyholder and the carrier under which both parties agree to pause, or toll, the running of an applicable limitations period for a defined window of time, often tied to the expected duration of the appraisal process or to a specific calendar date. These agreements are typically short, straightforward documents, but the details matter: what claims or causes of action are covered by the tolling, what date the tolling period begins and ends, and what happens if the appraisal concludes earlier or later than anticipated. Some agreements build in an automatic short extension if the award is not issued by a target date, which avoids the need to renegotiate the agreement under time pressure as a deadline approaches.
Attorneys representing policyholders generally raise the tolling question proactively before agreeing to appraisal, particularly if the loss occurred close enough to the relevant limitations period, whether that period arises from the policy’s own suit limitation clause or from a state statute, that appraisal’s timeline could plausibly run past the deadline. Carriers, for their part, often agree to reasonable tolling requests because doing so removes any incentive for a policyholder to file a protective lawsuit alongside the appraisal simply to preserve rights, which would undercut much of the efficiency appraisal is meant to offer both sides. Attorneys on both sides generally recognize that a protective lawsuit filed only to preserve a deadline, while the same parties are simultaneously working through an appraisal panel, creates duplicated cost and confusion that a short, well-drafted tolling agreement avoids entirely.
Policy language itself sometimes contains suit limitation provisions separate from any statute of limitations, commonly requiring that any legal action related to the policy be filed within a set period after the loss, often one or two years depending on the state and the specific policy form. These provisions can interact with the appraisal clause in ways that are not always intuitive, since some policies specify that invoking appraisal suspends the suit limitation period for the duration of the appraisal, while others are silent on the point, leaving it to negotiation between the parties or, if unresolved, to a court to sort out later.
Because these timing questions vary so much by state and by policy form, attorneys typically treat the tolling agreement as a standard, almost procedural step before recommending appraisal, rather than something to negotiate only if a deadline concern happens to be spotted. A clear, well-drafted tolling agreement lets both sides focus on the substance of the valuation dispute during the appraisal itself, without either party feeling pressure to abandon the process early or file a protective lawsuit out of caution about a looming deadline.
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.