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Appraisal, Mediation & Arbitration

Understanding The Appraisal Process

When policyholders and insurance companies have a disagreement regarding the cost of repairing or replacing damaged property, it can be quite frustrating, especially for the policyholder, who often feels he has no choice but to settle for the amount offered by the insurance company. Whether by design or not, the insurance companies do not always notify policyholders of their right to participate in various forums to resolve property damage insurance claim disagreements which are becoming more common.  Consequently, many policyholders never realize that they have a right to dispute an insurance settlement amount, nor do they understand how to properly initiate a property insurance claim dispute.

One way for policyholders to dispute their insurance company’s offer is to invoke the Appraisal provision within the insurance policy.  When conducted properly, Appraisal can be a very effective alternative dispute resolution process.

The Appraisal clause may include the following language and is a good general explanation of how Appraisal works:

APPRAISAL - "If you and we fail to agree on the amount of loss, either may demand that the amount of loss be set by Appraisal.  If either makes a written demand for Appraisal, each shall select a competent, independent appraiser.  Each shall 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 residence premises is located to select an Umpire.  The Appraisers shall then set the amount of the 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 loss".

If you have a disagreement with your insurance company over the cost of repairs or replacement of your damaged property, Contact Corbitt Public Adjusting, LLC to discuss whether or not Appraisal may be an appropriate option for you.


Understanding Mediation

In addition to Appraisal clauses, many insurance policies now have Mediation provisions in them. Mediation is not binding and is less costly to the policyholder.  The cost to the policyholder typically is defined by the mediator’s time in setting-up, preparing for and attending the Mediation. Often times, we negotiate that the carrier is responsible for the cost of Mediation. 

Like anything, there are procedural issues you will need to prepare for. While not all Mediations are successful in terms of settling a claim, you do get the benefit of knowing and hearing in detail the other side’s position which may help you to prepare for the appraisal process.

If you have questions about Mediation, we will be glad to discuss this process with you or refer you to competent legal counsel for any legal questions you may have.

Understanding Arbitration

In the insurance industry, Arbitration is used as a means to resolve a claims dispute in place of litigation. In these instances, both the insurer and the policyholder select an independent individual known as an Arbitrator, or a panel of Arbitrators, to decide the matter based on the facts available. Once the Arbitrator or Arbitration panel comes to a decision, an Arbitration award is issued. This award may be a legally binding decision on not only the amount of the covered loss, but also fees, further damages, and/or potential disciplinary actions required to resolve the dispute.

Arbitrators should be unbiased and unaffiliated with any party involved. Once the Arbitrator or panel is selected, each party has the option to represent themselves or to obtain legal counsel. After the Arbitrator or Arbitration panel comes to a decision, the outcome can be binding or non-binding depending on the Arbitration provision in the insuring agreement.

While in some ways arbitration is favorable because it is a much faster and less costly route than going to court, some insurers have opted to utilize mandatory Arbitration provisions in their policies. These provisions may put policyholders at a disadvantage by limiting the timeframe within which a party can file for and appeal the arbitration, the awards granted to the policyholder, and more.

Although Arbitration can be a process that is beneficial to the parties that choose to engage in it, its use by insurance carriers has also been partly to fix the amount of loss for property damage claims, helping them avoid legal repercussions for bad claims resolution practices. In recent years, some insurers have found that implementing mandatory, pre-dispute Arbitration provisions in their policies can be used to gain an unfair advantage in fighting lawsuits by their policyholders. This is because making the Arbitration process mandatory leaves the policyholder without other means to further dispute a claim. Some insurance companies employ these clauses to immunize themselves from bad faith claims or wrongful claim denials.


It is important to select an Arbitrator that is experienced in Arbitrating first party property claim disputes and understands the process. Contact Corbitt Public Adjusting, LLC to discuss whether or not Arbitration may be an appropriate option for you.

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