The appraisal clause turns an open-ended disagreement over the value of a claim into a defined process with a binding result on the amount. Here is how it typically works in Alaska, step by step. Your policy's wording always controls, so read your own appraisal clause alongside this guide.
Before you start: is appraisal the right tool?
Appraisal is designed for disputes over how much a covered loss is worth. It is generally not the place to resolve whether the loss is covered at all, whether an exclusion applies, or how the insurer handled the claim. Those questions may need an Alaska attorney. If coverage is accepted and the gap is about scope or price, appraisal may fit well.
Pin down the disagreement
Appraisal resolves the amount of loss. Before anything else, confirm that coverage is accepted and that the dispute is about scope or price. Get the carrier's full itemized estimate in writing.
Build your own number
Get an independent, line-item estimate that reflects current costs where the property is, including freight, travel and seasonal access when they apply.
Send a written demand
Follow your policy's appraisal clause. Most require a written demand. Keep a copy and proof of delivery.
Name the appraisers
Each side appoints its own appraiser, often within a set number of days of the demand. Your appraiser should meet the policy's independence requirement.
Select an umpire
The two appraisers try to agree on a neutral umpire. If they cannot, many policies let either side ask a court in the state where the property is located to appoint one.
Appraisers work the differences
The appraisers inspect, exchange estimates and go line by line. Most items are usually resolved at this stage.
Umpire decides what is left
Remaining items go to the umpire with supporting photos, measurements and pricing. The umpire may inspect the property.
Signed award and payment
An award signed by any two of the three sets the amount of loss. Payment then follows under the policy terms, subject to deductibles, limits and depreciation.
How long it takes
A straightforward residential appraisal often resolves within two to three months after both appraisers are named. Larger commercial claims, contents-heavy files, umpire hearings and properties that are hard to reach in winter can take longer.
What it costs
Each side typically pays its own appraiser, and the umpire's fee is usually split evenly. Fees vary by claim size and complexity. Get your appraiser's fee in writing before work begins.
Common mistakes
- Invoking appraisal before the full scope of damage is known
- Appointing an appraiser who has a financial interest in the repair
- Missing a deadline in the appraisal clause or the suit-limitation clause
- Signing an award without checking how replacement cost, actual cash value and depreciation are stated
- Expecting appraisal to resolve a coverage denial