What is the Appraisal Clause?
Chances are your homeowner’s insurance policy contains an appraisal provision. Understanding appraisal provision in an insurance policy is straightforward. However, navigating through the appraisal process without the help of an insurance claim lawyer or public adjuster is risky. Property damage disputes frequently involve an appraisal of the damaged property. Generally speaking, the insurance company will offer to pay you the cost to repair or replace a particular asset. In some situations, however, the insurance company may offer to pay you far less than what it actually costs to restore your property to its pre-loss condition. When that happens, you likely have options to dispute the insurance company’s offer through an appraisal clause in your insurance policy.
The appraisal clause sets out the process to value the cost of restoring the property to its pre-loss condition if you and the insurance company disagree about the value of the loss. Most insurance contracts will require a written demand to trigger the clause.
Typically, within 20 days of the written demand, both you and the insurance company will select independent appraisers. Each party must also notify the other side regarding who their appraiser will be as well. Then, these appraisers designate an “umpire.” If the appraisers cannot agree on an umpire, then a judge can step in to help. These three players—the two appraisers and the umpire—are often referred to as “The Appraiser Panel.”
Each appraiser then takes a look at the damage to determine the value of the loss. If the appraisers do not agree, then their disagreements are submitted to the umpire. The umpire will then decide on a fair value for the loss. Once the umpire makes a decision, that amount is binding on both the insured and the insurance company.
The appraisal clause prevents the parties from litigating over the amount of the loss. It can be a faster and more cost-efficient process compared to litigation, but may be wrought with peril. As such, you should contact Insurance Claim Lawyer, JP Salas to discuss your options.
The Appraisal Clause and Coverage Decisions
In Florida, appraisal clauses are a hot button issue when an insurance company denies coverage. In particular, some courts have allowed the Appraiser Panel to decide issues of causation. That is, the panel could evaluate what caused the harm and determine whether that particular cause was covered by the insurance policy without ever involving a judge.
However, Florida courts have determined that the Appraiser Panel was inappropriately answering these legal questions and that a judge should make the final determination regarding whether there was coverage under the insurance policy.
The current trend is for insurance companies to modify the appraisal clause to include a note about coverage. Right now, it is unclear how these changes will affect Florida residents.
If you think your insurance company’s settlement offer is too low, you have legal options. A skilled insurance attorney can help you determine your legal rights and assert them on your behalf. Use our contact form to schedule a free case evaluation or call JP Salas Law at 954-315-1155 for more information.