Note: All fields are required.

 I have read and understand the Disclaimer.

from our blog

August 29, 2017

The Insurance Industry Quick-Hit Settlement

If you’ve been in a collision and it was someone else’s fault, odds are very good that you will hear from the at-fault driver’s insurance company as soon as possible. It’s a tactic that is happening more and more in Arizona. This is done for a variety of reasons: (1) the insurance company would like […]


Homeowner’s Insurance Appraisal Process

The term “appraisal” as defined in a homeowner’s insurance policy has an entirely different meaning than the one more commonly used in every day language.  Normally when we hear the term appraisal, we think of a real estate appraisal that is used to determine the value of a home.  However, in a homeowner’s insurance policy, the appraisal process is more similar to a three-member-panel arbitration proceeding which is used to determine the value of a personal property loss or home repair dispute that results from a covered homeowner’s insurance loss.

Similar to arbitration, the appraisal process is an alternative dispute resolution intended to resolve disputes without the need for litigation.  It is supposed to be less expensive to the insured and less time consuming. The majority of homeowner’s insurance policies enable appraisal when the insurance company and policy holder are unable to agree concerning the value of loss to a covered property.  Appraisal is not available when there is a coverage dispute. In an appraisal, each party generally names their own appraiser to value the loss and attempt to reach an agreement.  If the parties’ appraisers cannot agree on an amount, then it is up to a third appraiser, usually called an umpire, to resolve the dispute. Each party is responsible for the cost of their own appraiser and equally split the cost for the umpire. Attorneys’ fees and costs usually are not recoverable through the appraisal process.

Unfortunately in recent years, insurance companies have been writing complex agreements detailing the scope and procedure for the appraisal. These complex, sophisticated  appraisal agreements have led to an increase in disputes between the insurance consumer and their insurance companies. Of course, the insurance consumer has no input whatsoever into the terms contained within these appraisal agreements because the insurance company simply includes the language in the insurance policy. Because insurance contracts are generally considered contracts of adhesion, i.e., the insurer draws up the contract and the insured has little or no ability to make material changes to it, Arizona consumers best defense to unfair, unforeseen terms is Arizona’s “reasonable expectation” doctrine.

Insurance companies are also becoming more aggressive in insisting that the insurance consumer sign an appraisal agreement even though the insurance consumer may not understand that the agreement does not always cover the entire scope of the loss. The insured homeowner needs to make sure the agreement he or she signs completely encompasses the scope of the insurance loss. If it does not, the insurance company will argue that the insurance consumer should not be allowed to assert a claim for those additional damages not included in the agreement.

Comments Off on Homeowner’s Insurance Appraisal Process

Comments are closed.

  • Shane Harward Law Offices of Shane L. Harward PLC

    10575 North 114th Street
    Suite 103
    Scottsdale, Arizona 85259

    Telephone 480-874-2918
    Facsimile 480-588-5063

    By Appointment Only:
    4809 East Thistle Landing Drive
    Suite 100
    Phoenix, Arizona 85044

    Telephone 602-384-4638

    Mailing Address:
    Post Office Box 12877
    Scottsdale, Arizona 85267