When the insurance company has dug their heels in and won't pay. You have an avenue in your policy to resolve your disputed insurance claim amount.
It's called the “Insurance Claim Appraisal Clause".
If you and your insurance company find yourselves at an impasse, you have options. You or the insurance company have the right to demand what’s called “Appraisal”. You will actually invoke the insurance appraisal provision in the insurance policy.
The Appraisal Provision allows the policyholder and the insurance company to hire an independent appraiser to determine the value of the damages. The two appraisers will then mutually select an umpire. These three individuals are known as the Appraisal Panel. The object of the Panel is to determine The Amount of Loss. The Loss Amount is the total dollar amount needed to return the damaged property back to its pre-loss condition. This will be achieved by either the repair or replacement method.
Most policyholders are unaware of how to dispute and resolve their claim with the insurance company. Policyholders have a choice and a voice within their policy for this very purpose. It's called The Appraisal Clause, also known as The Appraisal Provision.
What Does the Umpire Do?
Typically, each appraiser submits a list of names to each other in an attempt to mutually agree and select the umpire. Once the Appraisal Panel is set, the policyholder’s chosen appraiser and the insurance company’s chosen appraiser will review the documents, estimates, and differences between them. The two independent appraisers will discuss and resolve the differences in damage and in cost. The two appraisers will present their position in an attempt to come to an agreement on the amount of the loss.
Sometimes issues arise where the two independent appraisers can’t agree on certain items. In this event, the two appraisers will submit their difference to the chosen umpire. The three will discuss the issues and try to reach an agreed settlement of the differences. As stated above, the settlement or final number is called The Amount of Loss. The final amount will be reflected on Appraisal Award form. Once any TWO of the three individuals on the Appraisal Panel sign the award form, the amount is binding. The amount of the Award is binding and is paid by the insurance company, to the policyholder.