Most homeowners never read the appraisal paragraph in their policy until they need it. In Rhode Island, the standard fire policy form set out in state law includes an appraisal provision, and most homeowner and commercial policies carry similar wording. Here is what it usually says and what it means in practice.
The core of the provision
If you and the insurer fail to agree on the amount of loss, either side can make a written demand for appraisal. Each side then selects a competent and disinterested appraiser, usually within 20 days. The two appraisers select an umpire. If they can’t agree within a set time, either side can usually ask a court to select one. The appraisers then set the amount of loss, and any disagreement goes to the umpire. A written award agreed by any two sets the amount of loss.
What it doesn’t do
Appraisal is about value. It doesn’t decide whether a loss is covered, and the insurer usually keeps its right to deny coverage even after an award. If coverage is disputed, that’s a matter for the insurer, the Rhode Island Department of Business Regulation’s complaint process or an attorney.
Three things to check in your policy
- Time limits for naming your appraiser after a demand
- Cost sharing for the umpire and appraisal expenses
- Any added conditions, such as requirements to submit a proof of loss first
Practical advice
Don’t invoke appraisal until you have the carrier’s itemized estimate, an itemized estimate of your own and good photos. The award is hard to undo, so the file should be ready before the process starts. Our readiness checkup walks through the essentials.