Property Loss Appraisal 101
What the appraisal clause is and why it can be helpful.
"If you and we fail to agree on the amount of loss, then either party may demand an appraisal of the loss..."
What is the Appraisal Clause?
When is the Appraisal Clause useful?
How does it work?
The appraisal clause, often found in most insurance policies, is a provision that can be used to help solve disputes regarding the value of property or the extent of the loss when an agreement cannot be made.
When an attempt to settle the value of the property or the amount of the loss has failed, either party can invoke the appraisal clause.
Once the contesting party has sent a written demand for appraisal, each party will select their appraiser and bear the expense of the appraiser. Both appraisers will then agree on an umpire in the event that an impasse has been reached. Both the insurance company & policy holder will bear the expense of the umpire equally should the umpire's services be required.
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Both appraisers will inspect the loss and create their own estimate. These two estimates will be compared and both appraisers will attempt to settle on a fair amount for the loss.
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If the two appraisers agree to an amount, they will create and both sign an award form which will be sent to the insurance company to release the funds. If they do not agree, the umpire will be used and in most cases will agree with one of the appraisers.
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