Appraisal Clause: Deceptive Practices by Insurance Companies

If you’ve done some Googling because of a total loss dispute with your insurance company, you probably came across information explaining your right to appraisal (also called the invoking the appraisal clause).

Unfortunately, because auto claim disputes are usually less than $10,000.00, it is an area that hasn’t traditionally attracted attorneys (but there are a few attorneys that will fight for you).

In fact, because the amounts in dispute are typically under $10,000.00, most insurance companies don’t even train their claims staff about the appraisal clause. 

I know. 

I was an adjuster for over a decade and NOT EVEN ONCE was the appraisal clause mentioned.  If you invoke the appraisal clause, you can bet that you will be dealing with a claims representative that has no clue what they are doing (if you’re an adjuster that thinks you know better, prove it).  

I educate adjusters and insurance carriers every week about this little known right that their insureds have.

So if you’ve read this far, you probably have already found that the typical and approved appraisal clause language in an auto policy is as follows:

“A.  If we (the insurance company) and you (the policy holder) do not agree on the amount of loss, either may demand an appraisal of the loss.  In this event, each party will select a competent and impartial appraiser.  The two appraisers will select an umpire.  The two appraisers will state separately the actual cash value and the amount of loss.  If they fail to agree, they will submit their differences to the umpire.  A decision agreed to by any two will be binding.  Each party will:

  1. Pay its chosen appraiser; and
  2. Bear the expenses of the appraisal and umpire equally.
  3. We do not waive any of our rights under this policy by agreeing to an appraisal.”

Seems pretty straightforward right?

If you don’t agree with the amount your carrier is offering you on your loss, then you can demand that two independent appraisers (and maybe an umpire) try and resolve the issue.

Isn’t the whole point of the clause to have somebody other than the policy holder and the insurance carrier discuss and attempt to resolve the value of the loss?  Right?

Nope, not according to some unfair insurance companies.

Since they have removed the word “impartial” from their appraisal clause in many States they seem to think they can just name themselves or an employee as their appraiser.  Really?!  Even without the term “impartial” or any other term that says that (like independent or unbiased) the clause IMPLIES that a party can’t name themselves. 

Either the carriers are really stupid, or they simply believe that they can willfully bully victims because of the difficulty the victim will have in finding an attorney.  Although one large and very patriotic insurance company is by far the worst offender, many other carriers have also omitted the words “impartial”, “independent”, and “unbiased”.

Trust me, it is not just an oversight, either.  It is an intentional attempt to maintain economic control of the claims process.  When the appraisal clause is invoked WITHOUT FAIL, the worst offenders attempt to name an employee of their OWN COMPANY as their appraiser (several of them are doing it and they are a few of the biggies – even a few small carriers are trying this). 

Of course, their appraiser (an employee) will simply re-iterate the amount that was already offered by the company and then keep refusing to agree with anybody else and demanding compliance with their own made up rules that are not required, needed or lawful.

Don’t let this happen to you. 

If you invoke the appraisal clause and your insurance company refuses to name an independent, unbiased, impartial appraiser, call me. 

I will refer you to an attorney that will help you assert your right to be treated fairly by your own insurance company. 

The more these insurance companies try this tactic, the more I will take note, the closer the issue becomes to a class action and the more I will fight to make sure justice is served.


Fill out the form below and see if we have the expert answers you need!

Trouble viewing the form or missing a submit button? Here is a direct link to it: