Insurance Appraisal

A Video Explaining how to Deal With a Demand for Insurance Appraisal

Almost all property insurance policies contain an “appraisal” 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.

© 2021 – Barry Zalma Barry Zalma, Esq., CFE, now limits his practice to service as an insurance consultant specializing in insurance coverage, insurance claims handling, insurance bad faith and insurance fraud almost equally for insurers and policyholders.

He also serves as an arbitrator or mediator for insurance related disputes. He practiced law in California for more than 44 years as an insurance coverage and claims handling lawyer and more than 54 years in the insurance business.

He is available at http://www.zalma.com and zalma@zalma.com. Mr. Zalma is the first recipient of the first annual Claims Magazine/ACE Legend Award. Over the last 53 years Barry Zalma has dedicated his life to insurance, insurance claims and the need to defeat insurance fraud. He has created the following library of books and other materials to make it possible for insurers and their claims staff to become insurance claims professionals.

Go to the podcast Zalma On Insurance at https://anchor.fm/barry-zalma;  Follow Mr. Zalma on Twitter at https://twitter.com/bzalma; Go to Barry Zalma videos at Rumble.com at https://rumble.com/c/c-262921; Go to Barry Zalma on YouTube- https://www.youtube.com/channel/UCysiZklEtxZsSF9DfC0Expg; Go to the Insurance Claims Library – https://zalma.com/blog/insurance-claims-library/  The last two issues of ZIFL are available at https://zalma.com/zalmas-insurance-fraud-letter-2/  podcast now available at https://podcasts.apple.com/us/podcast/zalma-on-insurance/id1509583809?uo=4