The Appraisal Process Explained: A Step-by-Step Guide

The Appraisal Process Explained: A Step-by-Step Guide

The property insurance appraisal process is one of the most powerful — and most misunderstood — tools available for resolving disputed claims. Here is how it works, step by step.

Step 1: Demand for Appraisal

Either the policyholder or the carrier may invoke the appraisal clause by sending a written demand. The demand must be timely — most policies require it within a specific period after the claim is denied or underpaid.

Step 2: Appraiser Selection

Each party selects a competent and impartial appraiser within the timeframe specified in the policy (typically 20 days). The appraiser represents their party's position but must remain impartial in their methodology.

Step 3: Umpire Selection

The two appraisers attempt to agree on an umpire. If they cannot agree within a specified period, either party may petition a court to appoint one. Selecting a credentialed umpire at this stage is critical.

Step 4: Inspection and Documentation Review

The umpire and both appraisers inspect the property, review all documentation, and exchange their respective estimates. The umpire evaluates each position independently.

Step 5: The Award

If the two appraisers agree on an amount, that agreement constitutes the award. If they cannot agree, the umpire reviews the disagreement and issues a binding award. The award of any two of the three parties (either appraiser plus the umpire) is final and binding.

Step 6: Payment

Once the award is issued, the carrier is obligated to pay the award amount within the timeframe specified in the policy.

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