Appraisal vs. Lawsuit
Appraisal, located within the Loss Settlement section of a policy, serves as an Alternative Dispute Resolution mechanism designed to address disputes arising when the Carrier and Policyholder cannot come to a mutual agreement regarding the amount of a loss. It serves as a viable alternative to pursuing a legal lawsuit.
It's important to note that the Appraisal process primarily focuses on determining the monetary value of the loss and does not address coverage issues. However, it may include or exclude specific items based on causation, with variations depending on the applicable state regulations.
Appraisal
Quicker Resolutions
Typically Quicker Resolution compared to a lawsuit
Expert Assessment
Appraisers are knowledgable, providing a professional assessment of the loss.
Must Pay Fees/ Costs
The final agreed on "amount of loss" is legally binding.
Cost Effective
Tends to be less expensive than pursuing lawsuit
No Appeal Potential
The signed award is legally binding to both parties
Final and Binding
Reduces the likelihood of further legal challenges
Lawsuit
Comprehensive Resolution
Lawsuits can address a wider range of issues, including coverage disputes
Expensive
Involve significant costs, including attorney fees, court fees, and other expenses.
Adversarial Nature
Can escalate conflict, making it less amicable than method resolution methods like appraisal.
Time Consuming - Slower
Lawsuits can be lengthy and time consuming, tying up resources and causing stress
Appeal is Possible
May become a drawn out process, even after a decision is made
May Recover Fees & Costs
May acquire additional costs and experience difficulty with receiving compensation
Pros & Cons
In comparison to other methods of escalation, such as legal escalation, appraisal
is, generally, a faster and more cost effective solution. When appraisal is recommended, we believe that it is the best method of escalation and the
most likely to provide a fair and desired resolution.
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However, there is risk in the appraisal process and hiring an appraiser does not guarantee a settlement in your favor. There are instances in which the appraisal settles at a less than ideal amount.
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