Appraisal
Appraisal is a formal, policy-defined process for resolving a disagreement over how much a covered loss is worth, where each side hires an independent appraiser and, if those two can't agree, a neutral umpire makes the final call. The Allen Thomas Group walks clients through the appraisal clause in their policy before a dispute happens, so they know it's a tool for valuing a loss, not for arguing about whether something is covered at all.
How the Appraisal Process Works
Once either the insurer or the insured invokes the appraisal clause, each party selects its own competent, independent appraiser. If those two appraisers agree on the loss amount, that figure becomes binding. If they disagree, they jointly select a neutral umpire, and any two of the three (the two appraisers and the umpire) can set the final amount, which is then binding on both sides.
Appraisal vs. Arbitration
| Appraisal | Arbitration | |
|---|---|---|
| What it resolves | Disputed dollar amount of a loss | Broader disputes, including coverage questions |
| Who decides | Two appraisers plus an umpire if needed | One or more arbitrators |
| Covers coverage disputes? | No, coverage must already be established | Can, depending on the policy or agreement |
Why This Matters
Appraisal only applies when both sides agree the loss is covered but disagree on the dollar value, such as a disputed roof damage estimate. It's usually faster and cheaper than a lawsuit, but a business should understand that invoking it locks both sides into a binding number once the appraisers or umpire decide, with very limited grounds to challenge the outcome afterward.
How The Allen Thomas Group Can Help You
We'll help you understand exactly how appraisal affects your coverage and cost, then shop your policy across 15+ A-rated carriers to find the right fit.
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