4 Best Practices to Optimize the Appraisal Process for Carriers

By Steve Liles, Jim Livingston, and Evan Williams | Published March 29, 2023

Picture this scenario. A commercial building takes the brunt of a major storm. The roof takes a beating because of all the hail. The building’s insurance carrier estimates roof repair costs to be around $10,000. The building owner disagrees. From their perspective, the damage from the storm was severe enough to warrant a total roof replacement, which costs quite a bit more than the original estimator’s evaluation.

Enter: an appraisal. The appraisal clause in insurance agreements provides a mechanism to avoid litigation and can also provide an avenue of compromise. It’s important to remember that appraisal is an alternative to litigation, and a more amicable way of resolving differences.

When faced with more appraisals, the question is: How can we make them easier and quicker?

Consider the following 4 best practices insurance companies can engage to optimize the appraisal process:

Have all your ducks in a row. Once there is an impasse and one of the parties demand an appraisal, it’s important for both sides to be prepared. This includes having the original estimate, the opposing estimate, and the formal document requesting the appraisal. Properly identify the opposing appraiser with their contact info and email.
Understand what the appraisal is for. For carriers, it is critical to have a thorough understanding of the appraisal—for instance, knowing what needs evaluation and what is the actual damage. Appraisal parties will need to know this information going in. Appraisals used to be utilized to determine value, but nowadays damage assessment tends to creep into the conversation and the process. However, damage assessments are also something that can be and are limited based on jurisdiction.
Specify what part of the claim is in dispute. Oftentimes claims are multi-layered. Sometimes the roof has been replaced, but the dispute is just over the interiors. That is why, for carriers, it is imperative to identify the part of the claim that is at the heart of the matter ahead of the appraisers arising on site for their inspection.
Work with the opposing appraiser. During this process there will be agreements and disagreements, and likely some compromise. If an agreement cannot be reached, an umpire is brought in. At this point, everyone submits their documentation to the umpire, and sometimes that involves another inspection with the umpire. Ideally, when two appraisers come together and agree on the final course of action, the final quote is signed, which requires two signatures. In cases where there is still an impasse, the umpire and one appraiser can be the two signatures needed to reach a conclusion. It is important to remember when an umpire is engaged that all three parties have open dialogue to avoid any ex parte discussions.

While the number of appraisals may be on the rise, the appraisal process itself doesn’t have to get more complicated. Understanding how to best support the appraiser panel with the above best practices can help reduce friction and cost and ultimately speed up the timeline and resolution of the dispute.

For help with appraisals, reach out to RMC Group today.

This information is intended for informational purposes only. Each restoration project has unique properties and must be evaluated individually by knowledgeable consultants. Additionally, cutting samples of roof assemblies should be performed by qualified professionals and in some instances approved by the roofing manufacturer. RMC Group is not liable for any loss or damage arising out of or in connection with the use of this information.