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Property insurance policies that include an appraisal clause typically set up a three-person process: one appraiser selected by the policyholder, one selected by the insurer, and an umpire who steps in when the two appraisers cannot agree on the amount of loss. The structure only works if each participant understands what role they are actually filling, and for the umpire in particular, and arguably for both appraisers as well, that role is fundamentally different from advocating for whichever side selected them, even though the selection process itself might suggest otherwise to someone encountering it for the first time.
An appraiser selected by a policyholder is not the policyholder’s representative in the way an attorney or a public adjuster might be, and an appraiser selected by an insurer is not defending the insurer’s interests the way defense counsel would. The appraisal clause asks each appraiser to form an independent, good-faith opinion of the amount of loss based on the physical evidence, and courts in a number of states have specifically addressed what happens when an appraiser instead acts as a pure advocate for whoever hired them, sometimes finding that conduct undermines the resulting award. The umpire’s neutrality is even more central, since the umpire’s decision, when it aligns with either appraiser, typically becomes binding on the amount of loss under most policy language.
What neutrality looks like in practice is fairly concrete. It means measuring what is actually there rather than what would produce a preferred number, applying the same standard to a policyholder’s claim of storm damage as to a carrier’s argument that a roof shows wear rather than impact, and being willing to reach a conclusion that disappoints the party who initiated the selection. A hailstorm claim in central Minnesota, for example, might involve genuine disagreement over whether certain roof damage reflects recent hail or years of accumulated granule loss from sun and freeze-thaw cycling, and a neutral appraiser follows the physical evidence, test squares, and documented storm history to a conclusion rather than starting from an assumption about which side is likely right.
Neutrality also shows up in smaller, less visible choices throughout an assignment, such as how carefully an appraiser documents a finding that happens to favor the party who did not select them, or how willing they are to revise a preliminary impression when new evidence surfaces during a joint inspection. An appraiser who only documents thoroughly when the finding supports the appointing party’s position, while treating unfavorable findings more casually, is practicing a subtler form of advocacy that can be just as damaging to the credibility of the eventual award as an outright refusal to consider contrary evidence.
Maintaining that posture requires ongoing discipline, since appraisers are typically paid by the party who selected them and human nature creates some pull toward pleasing whoever writes the check. Professional appraisers manage this by treating the assignment itself, not the appointing party, as the client, and by documenting their reasoning in a way that would hold up to scrutiny regardless of which side reviews it later. Coverage disputes, disagreements over whether a given item is even covered under the policy, remain outside an appraiser’s role entirely and belong to the insurer and the policyholder to resolve, typically with legal counsel if needed.
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.