Getting Started with your Appraisal Clause

 

The aftermath of a fire or other catastrophic event is the beginning of the frustrating process of dealing with the insurance company. Contractors have prepared estimates that are substantially higher than the amount that the insurance company is offering. The insurance company refuses to budge from their low-ball offer. Now what?

Beginning the Appraisal Process

The request must be made in writing; use certified mail. An example of a proper demand letter reads as follows:

 

Dear Insurance Carrier, My name is John Smith. I’m writing in regards to claim number 123-456-789. I would like to exercise my right to the appraisal clause found in my policy. I believe my loss is (amount) structure (amount) contents (amount) other structure (amount) ALE. Please hire your independent appraiser. Thank you.

Sincerely,

John Smith


Is the appraisal clause in MY policy?

In 17 years of experience as a professional damage appraiser, I have yet to come across a policy without the appraisal clause. It will generally be found in the long version of your policy in small writing.

 

Finding the Right Kind of Appraiser

It’s very important to find an appraiser who is experienced with insurance claims and has specific knowledge of the type of damage that is being disputed. This will not be a real estate appraiser. In the case of a building fire, the appraiser would need to be able to generate a detailed estimate, secure multiple bids to substantiate their own finding and understand the building codes. A structural engineer, for example, would understand how to replace the building, but would not be an expert at evaluating the contents. An insurance claim attorney understands the insurance policy, but the costs would be prohibitive. The whole reason for the Appraisal Process is to save time and money.

Hebert & Associates LLC has successfully represented clients via the appraisal clause process in Hurricane Katrina, Ike, and Sandy as well as dozens and dozens of fire losses, wind damage, basement flooding etc. in Monroe County.

 

Look for the Appraisal Clause

Take out your homeowners or commercial business policy and look for the “Appraisal Clause” or the “Appraisal Provision.” Most people don’t know it exists, but it’s designed to deal with this exact situation. It offers an alternative to either accepting the insurance company’s inadequate offer or filing a lawsuit, which would be very expensive and could take years. The Appraisal Clause offers a much quicker – and cheaper – way to settle the dispute by using independent appraisers to objectively determine the amount of the loss.

 

How Does the Appraisal Process Work?

The policyholder and the insurance company will each hire an independent appraiser. The two appraisers will then select an “umpire,” who will cast the deciding vote if the two appraisers cannot reach a decision. The intent of the Appraisal Clause Process is to remove the emotion from the dispute and have two experts examine the loss objectively.


Is the Appraisal Process the Best Choice?

That depends on how large the difference is between the insurance company’s offer and the estimate. For example, if the estimate is for $100,000 and the insurance company is offering $45,000, then the Insurance Appraisal Clause is the best way to resolve the situation. However, if there is only a small difference between the offer and the estimate, it wouldn’t be cost-effective.

It’s also important to realize that the purpose of the Appraisal Clause is to determine the amount of the loss to property ONLY. It will not deal with disputes about provisions of the policy, coverage, deductibles or anything except the amount of property damage and restoring the building to its pre-claim condition.


Beginning the Appraisal Process

The request must be made in writing; use certified mail. Read the policy for specific time limits, etc. and hire an independent appraiser.


Finding the Right Kind of Appraiser

It’s very important to find an appraiser who is experienced with insurance claims and has specific knowledge of the type of damage that is being disputed. This will not be a real estate appraiser. In the case of a building fire, the appraiser would need to be able to generate a detailed estimate, secure multiple bids to substantiate their own finding and understand the building codes. A structural engineer, for example, would understand how to replace the building, but would not be an expert at evaluating the contents. An insurance claim attorney understands the insurance policy, but the costs would be prohibitive. The whole reason for the Appraisal Process is to save time and money.

The appraisers at AppraisalClause.com know how to objectively resolve disputes with insurance companies. For cost effective insurance appraisal clauses resolution, contact AppraisalClause.com and get results FAST!

Leave a Comments