An insurance appraisal is a process for insured property owners and their insurers to resolve disputes over the actual value of the damage. An appraisal typically addresses the value of the loss, not the causation. In other words, the purpose of the assessment is not to challenge or dispute what caused the loss but rather the amount of financial loss.
Policyholders need to have a basic understanding of what an insurance appraisal is. Our experienced Miami-Dade County property insurance attorneys are here to help with everything you should know about appraisal.
Insurance Appraisal Clause
Many Florida property insurance policies include an insurance appraisal provision. An appraisal clause allows the insured to make a written demand to have your loss valued. You should always refer to the terms of your specific policy. Some insurance companies have a mandatory appraisal clause which requires an appraisal.
You always want to be on the lookout for terms like “must” or “shall” – which might mean that appraisal is required. Other insurance companies have removed the clause altogether. If that is the case, seeking an appraisal is not an option.
However, the majority of policies do not have a mandatory requirement but instead have policies that allow for either you or your insurance company to request an appraisal when there’s a disagreement on the amount of loss.
Insurance Appraisal Process
While the precise insurance appraisal procedure can vary from case to case, it generally follows a similar trajectory.
- You and the insurer will each choose an appraiser,
- The two chosen appraisers will select an umpire (if they can not agree on an umpire, the parties may seek a court referral), and
- The two appraisers will inspect the property and try to agree on the value of the damages.
If the appraisers cannot agree, the dispute goes to the neutral umpire. These three people involved in the appraisal are known as the appraisal panel. Typically, an appraisal award in Florida is binding and can not be overturned in a court except under rare circumstances (e.g., fraud).
Pros and Cons of Appraisal vs. Lawsuit
As with most legal procedures, appraisals have benefits and disadvantages. If the only thing in dispute concerning your property insurance claim is the value of the loss, appraisal offers a way to resolve the disagreement without pursuing litigation. Property insurance litigation can be expensive and time-consuming, potentially dragging on for many months. An appraisal offers a way to avoid added costs and time.
However, unlike arbitration or mediation procedures, the appraisal award or outcome is almost always final and binding, meaning if you are unhappy with the appraisal, you are nonetheless stuck with the result. It often takes away the right to have a jury decide how much your claim is worth.
Consult an attorney to discuss an appraisal’s specific pros and cons that may apply to your situation.
Miami-Dade County Property Dispute Attorneys
At Arias & Abbass, we are former insurance defense lawyers. We know exactly what to look for and how to maximize your claim. If you are considering an appraisal or wondering if one might be mandatory under your policy, contact us today to discuss your legal rights and options.
