Most property insurance policies contain an appraisal clause as a means of alternative dispute resolution. When a policyholder and their insurance company disagree on the extent of covered damages and/or the cost needed to perform repairs, the appraisal provision can be utilized as a method for resolving the disagreement. This process involves independent appraisers evaluating the property to establish the replacement cost or actual cash value, offering an alternative to legal proceedings.

 Reach out to our insurance claims appraisers in Austin, TX at Integrity Property Consultants to ensure that your side of the story is fully supported.

The appraisal clause should be invoked when there is a clear disagreement on the amount of money that will be needed to repair the damage covered inside a property claim, such as when the insurer's estimate appears insufficient or fails to account for all damages if negotiations between the policyholder and the insurer have reached an impasse, that is often a good time to invoke appraisal.

The appraisal process must follow the rules that are described in the pertinent insurance policy. These rules can vary between different policies, so it is important to always review the policy language before you decide to invoke appraisal. In most instances, the appraisal process is like what is described below. The appraisal process typically begins when one party (either the policyholder or insurer) notifies the other party in writing that they wish to invoke the appraisal clause. Both the policyholder and insurer individually select competent, impartial appraisers. These two appraisers then jointly choose a neutral umpire if necessary. The appraisers inspect the damage and evaluate the loss based on available evidence and market data. They then work together to reach an agreement on the necessary scope of repairs and pricing. If the two appraisers cannot reach an agreement, then the umpire joins the negotiation, and an agreement by at least two parties will become final.

Actual Cash Value (ACV) means the cost to replace or repair property minus depreciation for age, wear and tear, or obsolescence. Replacement Cost Value (RCV), on the other hand, is the cost to replace the damaged property with new property of like kind and quality, without subtracting depreciation. Depending on your policy and coverage, you may be paid ACV first and then receive a supplement after you reinstall or repair the item.

Typically, you pay for your chosen appraiser, and you split the costs of the neutral umpire with the insurer. Because both insurance claims appraisers in Dallas, TX and the umpire produce a binding decision, this cost-sharing helps make the method more accessible than litigation. Still, these costs can add up, so it’s wise to weigh the size of the dispute against potential gains.

No, you don’t need a lawyer to begin the appraisal process. Many policyholders work with insurance claims appraisers in Austin, TX without legal counsel because it is generally faster, more cost effective, and less adversarial than going to court. However, if your coverage situation is complicated, or if there are broader legal issues, discussing strategy with an attorney might make sense.

Appraisal can be used for a wide range of property damage claims, including but not limited to fire, wind, hail, water, flood (if covered), tornado, freeze, or vandalism. As long as the disagreement is about the amount of loss, you can often use appraisal. That said, if there is a coverage exclusion or a dispute about whether a peril is covered, insurance claims appraisers in Dallas, TX might not resolve that particular issue.

Hidden or latent damage, such as structural damage under a surface or water damage not immediately visible, is precisely why a detailed and impartial appraisal is valuable. Professional insurance claims appraisers in Austin, TX will inspect thoroughly, document both visible and hidden damage, and estimate repair costs for the full scope of loss. This ensures your claim is not undervalued because of unobserved damage, and gives your insurer a complete picture of the restoration needed.

Because appraisal decisions are often binding, your options depend on your policy language and state laws. In many cases, once an umpire’s decision is reached, it stands. However, if there was misconduct, procedural problems, or you believe the arbitration was unfair, you should consult an attorney who specializes in insurance disputes.