Q: Is the Appraisal process the same as Arbitration?
A: No. Arbitration is a more formal legal means of resolving an issue that would otherwise need to go to trial. As such, arbitration is directly overseen by the court jurisdiction in which it occurs. The Appraisal Clause of your insurance policy, on the other hand, provides a procedure through which you and your insurance carrier can attempt to resolve your differences without court supervision, and in a less formal setting.
Q: Who pays the Appraisers and the Umpire?
A: You pay for your Appraiser, the insurance company pays for its Appraiser, and the two of you – the policyholder and the insurance company – split the cost of hiring a third party, the Appraisal Umpire.
Q: Is an unbiased, disinterested Insurance Appraiser the same as a Real Estate Appraiser?
A: No. Although Real Estate Appraisers do evaluate real property such as the one you are filing a claim on, their expertise lies in the field of marketing. They are well-versed in determining a realistic price for selling your property, as is, in the local real-estate market. However, Real Estate Appraisers are do not have the training to determine the costs of building, rebuilding, or repairing a structure, nor are they schooled in the intricasies of preparing, documenting, and negotiating an insurance claim. You need an insurance professional for this sort of Appraisal.
Q: Is an Insurance Appraiser, under the terms of my policy’s Appraisal Clause the same as an Antiques Appraiser? an Art Appraiser? a Jewelry Appraiser?
A: No. Like the Real Estate Appraiser, these types of appraisers also have particular fields of expertise that deal with determining the value of an antique, or a work of art, or a piece of jewelry in its current condition. Such experts may occasionally be called upon during the insurance Appraisal process, in order to help fix the value of certain portions of your contents claim, but they are not trained in all the vast array of insurance-claim procedures or requirements, and therefore do not serve as Insurance Appraisers in the sense of the Appraisal Clause of your insurance policy.
Q: Should I be worried if my insurance company has demanded Appraisal? Does that mean we are going to trial?
A: No. The Appraisal Clause in your property-insurance policy is intended to help you and your insurance carrier resolve disputed amounts of your claim specifically without having to go to court. The Appraisal process can save both time and money for both you and your insurance company.