Most Alaska property policies contain a paragraph titled Appraisal, usually in the conditions section. It is only a few sentences long, but it sets out a process that can bind you and the insurer to a dollar amount. Here is how to read it.
1. The trigger
The clause usually begins with something like: "If you and we fail to agree on the amount of loss, either may demand an appraisal of the loss." The key words are amount of loss. Appraisal is about value, not whether the loss is covered.
2. The demand
Most clauses require a written demand. Some say nothing about format. Send the demand in a way you can prove it was received, and keep a copy.
3. Naming appraisers
Each side chooses its own appraiser, often within a set period such as 20 days after the demand. Many policies require the appraiser to be "competent and independent" or "disinterested." That generally rules out someone with a financial stake in the repair.
4. The umpire
The two appraisers choose an umpire. If they cannot agree within a set time, either side can usually ask a court of record in the state where the property is located to appoint one.
5. The award
The appraisers separately state the amount of loss. If they agree, that amount is set. If not, they submit their differences to the umpire. A written decision signed by any two sets the amount of loss.
6. Costs
Each side pays its own appraiser. Umpire costs are usually shared equally.
What the clause usually does not say
- It typically does not let the panel decide coverage.
- It does not usually change deadlines in other parts of the policy, such as the suit-limitation clause.
- It does not create a right to attorney's fees.