Sometimes a reasonable agreement with an insurance company just cannot be reached. When that happens you may need to consider invoking "The Appraisal Clause" in your insurance policy.
In every homeowner's insurance policy there is a clause known as "The Appraisal Clause."
It will say something like this:
"If you and we fail to agree on the amount of loss, either may demand an appraisal of the loss. In this event, each party will choose a competent appraiser within 20 days after receiving a written request from the other. The two appraisers will choose an Appraisal Umpire. If they cannot agree upon an Appraisal Umpire within 15 days, you or we may request that the choice be made by a judge of a court of record in the state where the "residence premises" is located. The appraisers will separately set the amount of loss. If the appraisers submit an agreement to us, the amount agreed upon will be the amount of loss. If they fail to agree, they will submit their differences to the Appraisal Umpire. A decision agreed to by any two will set the amount of loss.
Each party will:
a. pay its own appraiser, and
b. Bear the other expenses of the appraisal and umpire equally."
The purpose of the appraisal clause is to settle disputes related to the value of different parts of your claim. The word "value" is critical; only issues regarding what your claim is worth are appraisable. No other issues related to your claim can be settled in appraisal. For example, if you have a dispute regarding a coverage issue then you cannot use the appraisal clause to settle it. However, if you have a dispute as to what it will cost to repair your home, then the appraisal clause is the ideal venue to settle that dispute.
An appraisal award is final, and binding on all parties. Overturning or changing an appraisal award is very difficult, and happens only in the most extreme circumstances of fraud or serious error. An insurance appraisal is not to be entered into lightly!
The first key to a successful appraisal is the proper selection of your appraiser! The greatest skill your appraiser needs is experience in and an understanding of the insurance appraisal process. Don't make the mistake of selecting a contractor for your appraisal simply because they do good work. Unless they are experienced in both insurance claims and the appraisal process they are likely to make mistakes that can cost you a great deal of money!
The second and equally important key to a successful appraisal is the selection of an umpire. Too often the umpire is an individual who works entirely for insurance companies, such as an adjuster or an engineer. The best umpire is one who is not dependent on continued relationships with insurers and who is well versed in the issues involved. Since the appraisal is all about the value of the repairs necessary an ideal umpire might be a local contractor who does not perform insurance work directly for insurance companies.
