What to Know About the Appraisal Clause in Your Homeowner’s Insurance Policy

Property insurance policies are long and complex. Not too many people spend their free time reading through their coverage and policy clauses unless they’re faced with a situation that requires them to. But if you were to read through the fine print of your policy, you would see what’s called an appraisal clause. Hopefully, this clause is something you will never need to invoke, but if you do, here’s what you should know about how the process works and when you may need to do so. 

What is an Appraisal Clause in Your Insurance Policy?

The appraisal clause is found in most property insurance policies and is a provision that allows policyholders and insurance companies to resolve disputes about the value of property damage or the amount of a loss.

How the Appraisal Clause Works in Louisiana

The appraisal clause is invoked when there is a disagreement between the policyholder and the insurance company regarding the value of property damage or the amount of loss. Before invoking the appraisal clause, both parties must have made good faith efforts to resolve the question of loss and damages. 

Both parties must agree to invoke the appraisal clause, but either the insured or the insurer can make the request.

Once the appraisal clause has been invoked, each party selects an impartial appraiser to represent their interests. These appraisers should be professionals with expertise in valuing property and assessing damages. The two appraisers will work together to determine the value of the loss. 

During the appraisal process, both appraisers examine the property and review relevant documents, such as repair estimates, photographs, and policy details.

They will also consider other factors, such as depreciation, market value, and the cost of repairs or replacements.

If the two appraisers reach an agreement on the value of the loss, most insurers will agree to pay the settlement amount. If they cannot agree, they select an impartial umpire who ultimately makes the final settlement decision. While in Louisiana, the outcome is largely non-binding, most insurers agree to pay it.

Contact Us at KK&P Law Firm for Help

If you do not agree with your insurance company about the property damage or loss amounts incurred, invoking an appraisal may be one path to pursue. Before doing so, we advise you to speak with a Louisiana insurance law attorney to discuss your options. Contact our team at Kandell, Kandell & Petrie to speak to one of our New Orleans claims advisors. We are here to support you and help ensure you receive the relief you deserve for your property damage.