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How to Use the Appraisal Clause to Resolve a Claim Dispute
How to Use the Appraisal Clause to Resolve a Claim Dispute
It is never easy when you believe your car’s value has been underestimated by your insurance company. And disagreeing with the valuation of the insurance provider can be frustrating, but before you accept the settlement, there’s a clause included in most insurance policies that can help you get the compensation you deserve. The Appraisal Clause Auto Insurance option allows both you and the insurer to bring in independent appraisers to determine the exact value of your vehicle.
What is an Appraisal Clause in Auto Insurance?
What is an Appraisal Clause in Auto Insurance?
Many insurance policies offer the "appraisal clause," a voluntary alternative dispute resolution procedure that either party may use in the event of a disagreement. If the insurer and the insured parties agree on the extent of coverage under the policy but disagree on the amount of loss to which the insured is entitled, the usual appraisal clause permits the insured to submit a demand for an appraisal.
What is the Appraisal Process?
What is the Appraisal Process?
The appraisal clause, as outlined in the policy, is invoked by either the insured or the insurance provider. Most often, the insured starts the appraisal process by submitting an appraisal report prepared by an independent appraiser or IA and a demand letter citing the appraisal clause to the insurer. This stage can either result in the adjuster hiring their own IA to evaluate the vehicle or in the adjuster realizing their mistake, raising their offer, reaching a compromise, and settling the claim. The claim is settled when the two appraisers come to an agreement regarding the valuation and a document is signed, which is binding on all parties; or the appraisers are unable to reach an agreement, which results in a standoff.
What Happens if the Appraisers Cannot come to an Agreement?
What Happens if the Appraisers Cannot come to an Agreement?
The appraisers choose an impartial third-party appraiser if they are unable to agree on the vehicle’s lost value. After reviewing the appraisers' evaluations, the third-party appraiser renders a decision. The assessment made by the umpire becomes final if either of the appraisers agrees with it. The agreement would need to be signed by the third-party appraiser and one of the IAs. Further actions in accordance with policy or legal action may be required if neither appraiser sides with the impartial third-party appraiser.
What are the Benefits of Invoking the Appraisal Clause?
What are the Benefits of Invoking the Appraisal Clause?
Among the many advantages of invoking the appraisal clause and starting the procedure are its speed, relative affordability, and often a more diplomatic nature of conflict resolution. The policyholder can choose an unbiased, qualified appraiser who is knowledgeable about the particular dispute at hand and can support the policyholder in arguing for the maximum amount of compensation to be awarded. An appraisal will enable the parties to settle the disagreement without the necessity for months of discovery followed by a jury trial when it is merely a contest between opposing valuation experts. Furthermore, if the insured's valuation reasons are intricate or challenging, an appraisal may in some cases, result in larger compensation for the insured party.
Navigating a diminished value claim dispute doesn’t have to be stressful. The appraisal clause is a valuable tool that helps ensure you receive a fair settlement based on your vehicle’s true value. If you’re unsure of how to start your appraisal process or need expert help managing your claims process, the professionals at ADR Claims are there to guide you every step of the way.
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