APPRAISAL SERVICES

The Appraisal Process

At times, policyholders attempt to handle substantial and/or complex property claims with their insurance company directly, i.e. without the benefit of a professional property loss consultant. Many times MLA Claims is contacted by these same policyholders when an impasse has been reached.

Depending on case specific issues and/or insurance coverage, the insurance claim appraisal process may be a viable alternative dispute resolution. MLA Claim’s experts have extensive experience in providing appraisal services for Insureds.

In general, the insurance appraisal process is used to resolve valuation conflicts (i.e. how much is the covered claim worth) between insurance policyholders and their insurance companies. The outcome of the insurance appraisal process is almost always binding. The appraisal process should be utilized under specific circumstances for example when there is a valuation impasse between the parties such as a large delta between claim and offer. When both parties are willing to move forward with the appraisal process, the delta can comprise of pricing and/or scope discrepancies.

Most property insurance policies include an insurance appraisal clause that specifies how these disputes will be settled should they arise. Specifically, if an agreement cannot be reached and appraisal becomes necessary, you or your insurance company may initiate the appraisal process. From there, each party chooses a competent and independent appraiser. The appraisal clause in your insurance policy may include the following language and is another general explanation of how the insurance appraisal process works:
 

“If you and we fail to agree on the amount of loss, either one can demand that the amount of the loss be set by appraisal.  If either makes a written demand for appraisal, each shall select a competent, independent appraiser.  Each shall notify the other of the appraiser’s identity within 20 days of receipt of the written demand.  The two appraisers shall then select a competent, impartial umpire.  If the two appraisers are unable to agree upon an umpire within 15 days, you or we can ask a judge of a court of record in the state where the residence premises is located to select an umpire.  The appraisers shall then set the amount of the loss.  If the appraisers fail to agree within a reasonable time, they shall submit their differences to the umpire.  Written agreement signed by any two of these three shall set the amount of the loss.”

Cost of Appraisal

Each party is responsible for paying their hired appraiser. While MLA Claims only advocates on behalf of Insureds, it charges hourly rates in order to maintain its independence from the results. However, MLA Claims offers free initial inspections to Insureds to determine whether or not our services will reap a net result in excess of the anticipated costs of the appraisal process.

When both the insurance company and the policyholder agree to move forward with the appraisal process, they will split the cost associated with the umpire's services.