Appraisal Clause: A productive method for Insurance Claim Disputes

Virtually all property insurance policy contracts include an appraisal clause, which can be invoked if there is a dispute between the policy holder and the insurance company. The most common reasons for invoking the appraisal clause is the settlement amount.
Appraisal Clause
"If you and we fail to agree on the amount of loss, either one can demand that the amount of the loss be set by appraisal. If either makes a written demand for appraisal, each shall select a competent, independent appraiser. Each shall notify the other of the appraiser's identity within 20 days of receipt of the written demand. The two appraisers shall then select a competent, impartial umpire. If the two appraisers are unable to agree upon an umpire within 15 days, you or we can ask a judge of a court of record in the state where the residence premises is located to select an umpire. The appraisers shall then set the amount of the loss. If the appraisers fail to agree within a reasonable time, they shall submit their differences to the umpire. Written agreement signed by any two of these three shall set the amount of the loss." 
Recently, the public adjusting community has begun to realize the huge benefits of invoking their client's appraisal clause when faced with an impasse during settlement negotiations.
There are several key advantages to both the Public Adjuster and the Insured:
 
Public Adjuster or Attorney
CostsThe parties of the policy (the Insured and the Insurer) pay the cost of the appraisal.
ProfitsIn a case where the carrier offered a substandard or inaccurate value of loss, the appraisal process should increase the final RCV and ACV amounts, which will then increase the Public Adjuster's earnings (if the PA's remuneration is based on incentives).
TimeAs soon as the appraisal clause has been invoked, the Public Adjuster does not have to handle every aspect of the process, thus opening up time for business activities.
 
Policy Holder
CostsCompared to the 33.3% fee the Insured must pay to a law firm to file a lawsuit, the Insured will save significantly when utilizing an Appraisal Firm to handle the dispute.
Increased SettlementMany costs and damages are overlooked during the claim process; an appraisal can document and valuate all damages to determine the value of loss.
TimeAn appraisal can be resolved in a matter of a few months, whereas a lawsuit can take years.
 
Even Playing FieldAs soon as the appraisal clause has been invoked, the carrier's adjusters and their international staff of loss prevention specialists are now "removed" from the situation. One appraiser represents the Insured, and another appraiser, who will independently evaluate the loss and calculate the amount of loss, represents the carrier. Both appraisers will agree on a fair and unbiased Umpire, who will handle all disputed amounts between the two appraisers.
Most importantly, the Insured and their retained representation must choose a competent, diligent, and honest appraiser. A professional appraiser will not allow any "non-compliance" or "loss prevention" tactics to enter into the appraisal process. When faced with a legitimate dispute in valuation, the Insured's appraiser must aggressively seek to research, present, and support all findings, utilizing all evidence, testimony, and knowledge of the appraisal process in a strategic way.