How the Insurance Appraisal Process Works

On occasion, the insurance companies are unwilling to pay the present day, fair market value for the roof replacements. When this happens, the insured has the right to invoke the insurance appraisal process.

The Appraisal Provision allows the policyholder to hire an independent appraiser to determine the value of their damages.  In turn, the insurance company will also hire their own independent appraiser.  The two appraisers will then get together and select an umpire.  The umpire is basically an arbitrator, or what you might call the judge. If a disagreement between the two appraisers arises, they can present their differences to the umpire who will make a ruling.  These three individuals are known as the Appraisal Panel.  The object of the Panel is to determine The Amount of Loss.  The Amount of Loss is the total dollar amount needed to return the damaged property (your roof and/or any other damaged property) back to its original condition, either by repair or replacement.

What Happens Now?

Once the Appraisal Panel is set, the policyholder’s chosen appraiser and the insurance company’s chosen appraiser will review the documents, estimates, and differences between them.  The two independent appraisers will try to discuss and resolve the differences in damage and in cost.  The two appraisers will discuss their reasons for their position and try to come to an agreement.

Sometimes issues arise where the two independent appraisers can’t agree on certain items.  In this event, the two appraisers will submit their difference to the chosen umpire.  The three will discuss the issues and try to reach an agreed settlement of the differences.  As stated above, the settlement or final number is called The Amount of Loss.  The final amount is known as the Appraisal Award.  Once any TWO of the three individuals on the Appraisal Panel sign the award…the dispute is over!  The amount on the Award is binding and is paid by the insurance company, to the policyholder.  This amount will be due and payable to the contractor as it reflects the final negotiated total amount for the roof replacement.

The appraisal process is a time consuming process and should not be invoked until after your insurance carrier has made it clear that they are unwilling to negotiate to the present day, fair market value.  Most insurance carriers attempt to be fair in their settlements, so appraisals are not always necessary.