Appraisal presents a snare for the unwary. Most first party claims involve differing views as to the amounts owed for multiple claim elements. With little or no case law to guide parties in resolving such differences, policyholders with substantial property claims often find themselves embroiled in disputes with an insurance company that demand that the disagreement be resolved through appraisal.
Almost always, this places a policyholder at a distinct disadvantage, against insurers with seasoned representatives adept at exploiting appraisals to resolve property claims in their favor. This two-part article seeks to level the playing field. Part I examines aspects of appraisal that present particular risk to policyholders, then lays out practical steps to take in advance of appraisal occurring. Part II, which will appear in an upcoming issue of the Insurance Coverage Law Report, looks at how to respond to a notice of appraisal and handling the appraisal itself.