Whenever a matter involves two parties and a lot of money, disputes are inevitable. When it comes to insurance claims, appraisals are used to objectively determine how much it would cost to replace damaged items or to restore damaged homes. As the insured, this may be a route you wish to take, or it may not be. Regardless, your insurance company may demand appraisal. Such a demand may be jarring if it feels like it came out of left field in the thick of your claim being litigated. Your concern is certainly valid—amounts determined by appraisal can be binding. Are there any limits to taking such a major course of action so late in the game? The answer is a bit complicated.
In the eyes of the law, there is a general expectation that a demand should be brought about in a reasonable and timely fashion. Generally, given previous case law, action should be taken shortly after a dispute surrounding an amount arises. However, the line can ultimately be drawn on a case-by-case basis. Furthermore, there is also an expectation that a demand for appraisal be brought about correctly and appropriately. One party must alert the other about the identity of the appraiser they have selected within a certain amount of time (typically 20 days) following the filing of a written demand. These appraisers must ultimately come to a consensus via an umpire. Perhaps most importantly of all, the demand and appraisal process must be in accordance with any guidelines dictated in the insurance policy.
The guidelines for timing can be fluid when it comes to an appraisal’s timing and tedious when it comes to determining if a demand was properly executed. As a result, it is worth having an attorney question the validity of a demand for appraisal in court (if you have not taken legal action already). Certain contexts absolutely warrant a legal investigation. For example, in a prior case surrounding a contents claim, a bike company sold their goods after the adjuster quoted them a number, which was verbally agreed upon. Because the company believed that consensus had been reached, the damaged contents were sold for parts. Over a year later, the insurer came back and demanded an appraisal on the grounds that the adjuster had not held the proper authority to propose such an agreement. As a result, the insurer no longer willing to pay the settlement amount. The company brought the matter to court given that so much time had passed and the verbal agreement had been reneged. Through this scrutiny, it was uncovered that the insurer had waived appraisal along the way, thus protecting the financial interest of the insured.
Because the ability to question the validity of a demand for appraisal can be dependent upon the context of the case, it is advisable to have your own legal counsel monitoring the scene. While an appraisal may help some claims, it may hinder others. Knowing where your case stands can help keep your journey to repairing your home on the right track.