Resolving insurance claim disputes can be a lengthy process, but there are legal protections in place to help ensure fairness. Even if the road feels long, it’s worth pursuing whatever path it takes to receive your rightful settlement for property damage. One such path to pursue if your claim is denied or underpaid is the appraisal process.
The appraisal clause in your Colorado homeowner’s insurance policy is a tool used for resolving disputes over property damage or loss amounts. It is an alternative dispute resolution (ADR) method that can effectively resolve claim disputes out of court. Either the policyholder or the insurance company may initiate the appraisal clause in writing, but before doing so, it’s important to be aware of these considerations:
Knowing When to Use the Appraisal Clause
Not every situation is suited for resolution through appraisal. Here are a few instances when appraisal may make sense:
- When you and your insurer disagree on the value of the damaged property. For example, if there is a dispute over the cost it would take to make the repairs.
- When you and your insurer disagree on the amount of loss or scope of work required to make your property whole again. A common example is when a roof is damaged by hail and there is disagreement over whether the roof can be repaired or if it needs to be replaced in its entirety.
- When you are looking for quicker resolution. The appraisal process is an arbitration method that can be more efficient and less costly than litigation.
On the other hand, the appraisal process is not used when there are coverage disputes. Be sure to thoroughly read your policy language to understand the specifics of your insurance policy, including when the appraisal clause can be invoked and the process for doing so. Some policies may have specific timeframes for initiating the process. Speak with a Colorado insurance law attorney if you have any questions.
Other Appraisal Considerations
In addition to evaluating the specifics of your claim and whether it makes sense to pursue an appraisal, you must also keep costs and other considerations in mind.
The costs for appraisers and an umpire are typically split between the insured and the insurer. For smaller claims, it’s possible that the costs of appraisal may outweigh the potential increase in settlement.
Moreover, the resulting decision reached through the appraisal process is binding on both parties. It cannot be appealed except in limited circumstances. It’s essential to consider if you’re willing to accept the appraised value or loss amount determined by the appraisers or umpire before pursuing the process.
Contact Us at KK&P Law Firm for Help
Invoking the appraisal clause in your insurance policy is a significant step in resolving disputes over property damage or loss amounts. Before proceeding, carefully consider the specific details of your policy, the costs involved and other implications of the decision.
If you’re uncertain about the process or your rights, contact us at Kandell, Kandell & Petrie for help. We can review your case and guide you through your options during a claim appeal, appraisal, or litigation, if it becomes necessary. We can also act as appraisers and umpires, or we can vet and suggest qualified appraisers to act on your behalf.
