Before you start: is appraisal the right tool?
Appraisal answers one question: how much does the covered damage cost to repair or replace? It is the right tool when the insurer has accepted the claim, at least in part, and you disagree about scope, quantities or price. It is usually the wrong tool when the claim was denied, when the argument is about an exclusion, or when the gap is too small to justify the cost.
The seven stages of insurance appraisal
1. Pin down the disagreement
Appraisal starts with a specific dispute about the amount of loss. Before anything else, compare the carrier’s itemized estimate with your own and list the differences: missing slopes, short quantities, pricing, matching, code items. If the dispute is really about coverage, appraisal is the wrong tool.
2. Send the written demand
Either side can demand appraisal in writing under most policies. The demand should identify the claim, state that you disagree on the amount of loss and invoke the appraisal provision. Keep proof of delivery. Some policies set a time for each side to name its appraiser after the demand.
3. Each side names an appraiser
You choose your appraiser and the insurer chooses its own. Most clauses require each appraiser to be competent and independent or disinterested. Your appraiser inspects the property, builds a line-item estimate and gets ready to defend it.
4. The appraisers select an umpire
The two appraisers try to agree on a neutral umpire. If they cannot within the time the policy allows, either side can usually ask a court where the property is located to appoint one.
5. The appraisers work the numbers
Your appraiser and the carrier’s appraiser meet, inspect together if needed and go through the estimates line by line. Every item they agree on is settled. Many claims resolve entirely at this stage.
6. The umpire decides what is left
Items the appraisers cannot agree on go to the umpire with photos, measurements and pricing support. The umpire may inspect the property and will decide each open item.
7. Two signatures make the award
When any two of the three panel members sign the award, it sets the amount of loss. The award should list replacement cost and actual cash value clearly. The carrier then pays according to the policy, applying the deductible, limits and any prior payments.
How long it takes
A straightforward residential appraisal often finishes within two to four months after both appraisers are named. Large commercial losses, farmsteads with many buildings and panels that need an umpire hearing can take longer. Delays usually come from scheduling inspections and gathering documents, not from the panel itself.
What appraisal does not do
- It does not decide whether something is covered.
- It does not award damages for bad faith or attorney’s fees.
- It does not extend policy deadlines on its own.
- It does not raise your policy limits.
South Dakota law gives policyholders separate remedies when an insurer handles a claim unreasonably, including a recognized bad-faith claim and, in some situations, attorney fees when a refusal to pay is found to be vexatious or without reasonable cause. Those are legal questions for a South Dakota attorney, and they sit outside the appraisal process.
Common mistakes to avoid
- Demanding appraisal too early, before hidden damage is opened up and documented.
- Naming an appraiser with a stake in the repair, which can give the other side grounds to challenge the award.
- Bringing a lump-sum bid instead of a line-item estimate.
- Signing an award that does not separate RCV and ACV, which can cause new arguments about depreciation.
- Losing track of the suit limitation date while appraisal is underway.