Policyholder Question: Who pays for insurance appraisal?

Q. My insurance company will not submit a letter of demand for the appraisal clause. If I do, will I then be responsible for all fees? My policy reads if they do the letter of demand, they will pay for all my appraisal fees.  

A. Thank you for your question. Most property policies we have seen over the years require you to pay for your appraiser fees and cost. Likewise, the insurance company has to pay their appraiser fees. If an umpire is involved, that person’s fee is split evenly between you and your insurance company including any expert the umpire may want to use to help him or her make a ruling. I would caution you that if you are going into an appraisal to make sure you know who the umpire is and that both parties have agree to that person. This should all be in writing and signed by the two appraisers and the umpire.

If the two appraisers cannot agree on issues, then it likely will be difficult for them to reach an agreement on an umpire choice. The umpire plays a critical roll in this process if used.  Many times it comes down to that person making the call. So you want to be sure you have checked out and are aware of any bias the umpire may have before they are signed on. Make sure you check out any person the insurance company offers up as an umpire by speaking with the person, asking them if they have worked with the other appraiser and /or done a lot of work for the insurance company.

Should the two appraisers not agree on an umpire, a court having jurisdiction will appoint one. This will require the filing of a court action to get the matter on the courts calendar. You will need to check with a lawyer in your area who is competent in these matters should this be heading to court for any reason.

Finally insurance policies forms, rules, and regulation vary from state to state, so read your policy. You may also want to check with your states office of insurance regulation. Insurance is regulated by each individual state. Rules and regulations can vary and information that may help you to understand the appraisal process in your state should be available from them.

If you have questions regarding any property insurance claim related issues please call 800.321.4488 or contact us to submit a question to one of our public adjuster insurance claim experts.

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