Most homeowners’ insurance policies provide disputes over the value of the claim can be taken to appraisal and the amount determined by disinterested parties. The appraisal clause has its roots in the statutory fire policy addressed in earlier posts. The statutory provision provides for appraisal upon the request of either party to the claim. The insurer can request appraisal or the insured can request it. The process is one in which each side selects a competent and disinterested appraiser to determine the extent of the loss. Before the appraisers ever meet to appraise the damage, they select a competent and disinterested third person to serve as an umpire for the resolution of any disputes between the appraisers. If the two appraisers cannot agree upon an umpire, there is a provision made for appointment of the umpire by the court.
Initially, it is the job of the appraisers to try to reach an agreement as to the amount of the claim. The umpire is supposed to resolve any dispute upon which an agreement cannot be reached by the appraisers. In many cases, the umpire is never actually utilized as the two appraisers are able to reach an agreement. In other situations, the dispute is so contentious that the decision of the appraisers and the umpire is rejected by one or both parties and suit filed.
It is important to remember in Oklahoma that the party invoking the appraisal process is usually bound by the decision of the appraisers, while the non-requesting party has the right to litigate the amount of the award. You will want to carefully consider the aspect of the appraisal provision before actually making demand for the procedure.