Appraisal Clause or Right to Appraisal

The Appraisal Clause Process (the hidden clause in your auto insurance policy)

1st party claims with your own insurance company

An appraisal clause is a clause or paragraph found in most but not all insurance policies. It is designed to be a way of reaching a settlement when there is a dispute over the amount of a loss between you and your insurance company and can be invoked by either party. The appraisal clause can be utilized when there is a dispute over the cost to repair your vehicle, the value of your vehicle in a total loss claim or the diminished value of your vehicle if you reside in a state where you can make a 1st party claim for diminished value. The appraisal clause is generally found in the “Damage to Your Auto” section of your policy. Following are the basic steps involved in the execution of the appraisal clause of most policies.

 

Step 1: Invoking Your Appraisal Clause

You will write a letter to your insurance company telling them that as a result of your inability to reach a mutually agreeable settlement, you are invoking the appraisal clause of your policy. The letter should be sent by certified mail/return receipt or through email.  If it is done through email it is recommended that you follow up with the claims representative to assure they received the notice.

 

Step 2: Selection of Appraisers

In the appraisal clause process, each side will select a competent appraiser to assess the loss. Each side will be responsible for paying their chosen appraiser. You should select an appraiser who is knowledgeable in the specific area that is the subject of the dispute and who is familiar with the appraisal clause process. Your selected appraiser should be able to be objective and impartial. Your appraiser should not do any work for the insurance company with whom you are having the dispute.

 

Step 3: Completion of The Process

Your selected appraiser as well as the appraiser selected by your insurance company will each independently appraise the loss. The two appraiser will then communicate and discuss their findings. During this process the two appraisers will attempt to reach a mutually agreeable figure. If the two appraisers are unable to reach an agreement then the two appraisers will mutually select and agree upon a third party Umpire appraiser who will review the positions and documentation of the two primary appraisers and may also do an inspection and assessment of his own. If an umpire appraiser becomes necessary, you and your insurance company will each pay half of the cost of the umpire. Then an amount agreed upon by any two of the three appraisers will be final and binding on all parties.

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Beware of Appraisers Posing as Consumer Advocates

Before hiring an appraiser, Ask them how many diminished value claims are referred to them by Insurance Companies. The way they answer this question will tell you about their intentions.

Insurance companies like to minimize the amount they pay out on claims. Any Appraiser stating they can get you a diminished value appraisal the insurance company will accept likely works for the insurance company, and this represents a conflict of interest for the vehicle owner.

Testimonials

I've Know RJ for years through my being he and his father's industry/business consultant (Auto Damage Experts, Inc. (ADE) and have found RJ to be a person of integrity and honor... and he can be a pit-bull when helping his customers protecting their rights.

While some may now see us as competitors, I am proud to have RJ as an industry colleague as I know he will represent it with humility and his ongoing quest to provide the best serve possible. Proud to have him as a member of the Post Repair Inspection profession.

Wishing him the best in his new endeavor!

Barrett Reed Smith r May 8, 2017