The Insurance Appraisal clause is usually found within your property insurance policy. It is an alternate dispute resolution which can resolve the disagreement between policyholder and insurance company regarding the dollar amount paid for an insurance claim.
Please know that Insurance Appraisal does not determine or open coverage. The coverage needs to be established and opened by the insurance company before Insurance Appraisal is invoked.
If the coverage has been opened by the insurance company then it may be appropriate to invoke insurance appraisal.
Insurance Appraisal is a method of alternative dispute resolution that is found in most homeowner and commercial insurance policies. The verbiage in the policy may dictate how the appraisal process is handled.
Insurance Appraisal is appropriate when there is a disagreement over the loss amount of an insurance claim. This usually includes: scope of work, method of repair, and pricing.
When properly executed, appraisal shall be binding on the parties as to the amount of loss. If an amount is determined in favor of the insured, the insurance company shall still apply their coverage analysis to the appraisal award to determine the final dollar amount paid to the insured.
This is important because if the appraisal is not properly invoked or properly executed the process may not be so binding.