Resolving Your Homeowner Claim With Appraisal
By Doug Dorner, Esq.
For homeowners seeking to recoup damages through their homeowner’s insurance policy, many are finding that increasingly their carrier is requesting the use of appraisal. To start, we must first differentiate between what most homeowners know of appraisal and what appraisal means in a homeowner insurance claim.
Most people will understand appraisal to mean the unbiased professional opinion of a home’s value. This is typically used in purchase and sale transactions and in refinance transactions.
Appraisal in a homeowner’s insurance claim is entirely different.
Appraisal, as it refers to homeowner insurance claims, is much like binding arbitration. This means that the decision rendered during the process is binding on both the homeowner and the insurance carrier.
The ability to utilize appraisal during a claim is typically dictated by the language of your homeowner’s policy. Some policies will allow either party to invoke (declare their intent to use appraisal) and the other party is obligated to participate. Other policies will require that both parties agree to appraisal before it can be invoked. But once invoked, several things happen.
Each party (the homeowner and the carrier) will select an appraiser to represent them during the process.
These appraisers will evaluate the damages to the property and any estimates or invoices for work that needs to be done. Each appraiser typically will have extensive experience in the area that is being appraised.
For example, if the damage loss is related to roof damage, then the appraisers will typically be roof experts.
Once each appraiser has made his or her determination on the loss they will try to see if they can come to an agreement as to the dollar amount and scope of the loss.
If they do, then the claim is resolved. If they do not, then each appraiser will nominate an impartial “umpire” who will review both appraiser’s positions and make a final ruling. Again, this ruling is binding on both parties.
Some might ask, “is this a good thing?”. The answer honestly depends on several factors.
What is the expected timeline of my claim?
Appraisal can speed up the claim resolution timeline. This is because in appraisal the parties agree to place the final determination of their claim in the hands of two appraisers and possibly one umpire. Typically, appraisal takes between 90-120 days whereas a lawsuit will typically take longer.
Who decides my case?
Here, it really becomes a choice between having a jury of your peers (who may have no experience in insurance damages or claims) decide if the carrier is responsible versus having two experts in field determine the carrier’s responsibilities.
What happens if I don’t like the result?
In a lawsuit, if a party feels as if the determination of the jury or the Court is unreasonable, they have the option of appealing the decision to a higher court. In appraisal, the parties have the option of utilizing an unbiased “umpire” to settle any differences in opinion regarding the appraisers determinations.
Ultimately, whether you choose to litigate or appraise your insurance claim will depend on these factors and sometimes others. It is best that you consult with an attorney to discuss your options to determine if appraisal is appropriate for you.
Doug Dorner, Esq.
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