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Explaining how to Deal With a Demand for Insurance Appraisal   

https://zalma.com/blog

Almost all property insurance policies contain an \\u201cappraisal\\u201d clause  similar to that in the Standard Fire Insurance Policy.  This appraisal provision is, in many states, considered an arbitration  proceeding. 

In California, an appraisal complies with the requirements  of California Code of Civil Procedure section 1280 et seq. It is easily  implemented and works promptly.  In some states, as becomes clear below, appraisal is not considered to  be an arbitration, but is still enforceable as a contractual provision.  However, the use of such appraisal will be rendered meaningless if the  appraisers are bound to the some of the definitions of actual cash value  issued by various courts and regulators. 

They are not entitled to  resolve coverage issues but are compelled to reach their conclusions in  accordance with the law of the state where the appraisal will take  place.  The appraisers are limited, however, only to decide the amount of loss  and the value of the property in question. (Jefferson Insurance Company  of New York v. Superior Court, 3 Cal. 3d 398, 90 Cal. Rptr. 608 (1970).)  The appraisers cannot make decisions outside the limited scope of the  policy language. They cannot find that the insured did not own the  property, that the insured had no interest in it, that the insured was  not entitled to recovery under policy exclusions, that the insured  presented a fraudulent claim, or that the loss exceeds the policy  limits.  ZALMA OPINION   Appraisal is an important right available to insurers and their insureds  to resolve, without a great deal of expense, lawyer fees, and time to  resolve the usual dispute between insurers and insured about the amount  of loss.  

 \\xa9 2021 \\u2013 Barry Zalma