Business and homeowner insurance policies provide for extra-legal dispute resolution. Before an Insured can sue their insurer, first party insurance claim disputes are required to be resolved through a contractually mandated process called “Appraisal.” This insurance policy requires claims disputes to be resolved through a contractually mandated process called “appraisal,” which reads, “If you and we fail to agree on the amount of actual cash value or amount of loss, either one can demand a determination by appraisal. If either makes a written demand for appraisal, each shall select a competent, independent appraiser and notify the other of the appraiser’s identity within 20 days of receipt of the written demand. The two appraisers shall then select a competent, impartial umpire. If the two appraisers are unable to agree upon an umpire within 15 days, you or we can ask a judge of a court of record in the state where the resident premises is located to select an umpire. The appraisers shall then set the amount of the actual cash value and loss to each item. If the appraisers submit a written report of an agreement to us, the amount agreed upon shall be the amount of the actual cash value and loss. If the appraisers fail to agree within a reasonable time, they shall submit their differences to the umpire. Written agreement signed by any two of these three shall set the amount of the actual cash value and loss. Each appraiser shall be paid by the party selecting that appraiser. Other expenses of the appraisal and the compensation of the umpire shall be paid equally by you and us.”
Either party can demand appraisal to determine the loss, damage, and valuation of a claim, but the appraisal panel is not authorized to rule on matters or coverage.