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Read below to understand the insurance appraisal process

UNDERSTANDING THE INSURANCE APPRAISAL PROCESS AFTER INVOKING THE INSURANCE APPRAISAL CLAUSE Many homeowners and business owners find themselves disagreeing with the insurance company’s analysis of their insurance claim. Yet, they are not familiar with their option to invoke The Insurance Appraisal Process. In some cases the insurance company disagrees with the contractor’s numbers. Who’s right, who’s wrong? For many claims the only available option is to resolve a dispute may be a clause buried in the “Conditions” and/or “What to do after a loss,” sections of the policy. It’s called The Appraisal Clause – also known as the Appraisal Provision. WHAT IS THE DIFFERENCE BETWEEN ARBITRATION AND THE INSURANCE APPRAISAL PROCESS? Do not confuse the Appraisal process with Arbitration. It’s very similar, in a general understanding sense, because most people have heard of arbitration before. Let’s separate the two for a better understanding. ARBITRATION Arbitration can be defined as a process to resolve a dispute or difference between two parties. The appointee allows for a decision by a person or persons other than a court of jurisdiction. Arbitration can be regarded as a private for of litigation. The procedure for arbitration is also regulated by a statue. Arbitration is a legal process resulting in a final and binding decision issued by the arbitrator which can only be challenged under very exceptional circumstances. Arbitration works under a very similar legal mechanism as litigation, but with some added advantages. It is conducted in a private place so that confidentiality can be preserved. APPRAISAL CLAUSE The Appraisal Clause does not bind either party to its findings. The Appraisal Clause is meant to be the method for determining disputed values. If the value of an item or the costs to repair or replace it cannot be agreed upon, then the insurance policy allows an appraisal proves to determine the amount of loss, or the loss of value. Appraisal cannot be used to determine what is covered under the policy. Appraisal is to determine the “amount” of the covered property only. The appraisal clause allows for a less costly approach to resolve property disputes by allowing them to be settled out of court. By keeping the process out of a legal and binding litigation, the result is a more timely resolution. The Appraisal Process allows for experts in the field for which damage is associated, to represent either side. So, an antique expert can be an appraiser for either side to determine the value of great grandma’s bedroom set. An attorney is not needed and there is no attorney client privileges, because it’s not a litigation process. APPRAISAL If we fail to agree on a loss amount, either one can demand that the amount of the loss be set by appraisal. If either makes a written demand for appraisal, each person shall select a competent, independent appraiser. Each shall notify the other of the appraiser chosen within 20 days of receipt of the written demand. The appraisers shall then select a competent, impartial umpire. If the two appraisers are unable to agree upon an umpire within 15 days, either of us can ask a judge of court of record within the state where the residence premises is located to select an umpire. The appraisers shall then set the amount of the loss. If the appraisers fail to agree within a reasonable time, they shall submit the differences to the umpire. Written agreement signed by any two of these three shall set the amount of the loss. DIMINUTION IN VALUE When a car is damaged in an accident and the repaired, the resale value may be less than a comparable car that has not been damaged. The damage results in a reduction or “diminution” in the resale value of the auto. An insured’s claim for this reduction in value may be made against a third party that negligently caused the damage to the owner’s auto, or it may arise from a first-party claims against the insured’s own physical damage coverage. The difference between the value of the loss before the harm and the value after the harm, the reasonable cost of repairs or restoration where feasible, with due allowance for any difference between the original value and the value after the repairs.

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