When a commercial roofing dispute involves the cost, scope, or cause of roof damage, property owners and insurers may consider several ways to resolve the disagreement. Two terms that are often confused are appraisal and litigation. Although both can be used when parties disagree about an insurance claim, they serve very different purposes.
Understanding the difference between appraisal and litigation can help commercial property owners make better decisions when dealing with a disputed roofing claim.
What Is Appraisal in an Insurance Claim?
Appraisal is a dispute-resolution process used primarily to determine the amount of a covered loss. It is commonly included in commercial property insurance policies.
For example, suppose a commercial building experiences significant roof damage after a Florida storm. The insurer agrees that some damage is covered but the property owner and insurer disagree about how much the covered repairs or replacement should cost. Depending on the policy, either party may be able to invoke the appraisal process.
Typically, each side selects an appraiser. The two appraisers attempt to reach an agreement on the amount of the loss. If they cannot agree, an impartial umpire may resolve the remaining valuation disagreement.
Appraisal is generally focused on the amount of loss, rather than deciding every legal or coverage issue surrounding the claim.
What Is Litigation?
Litigation is a formal legal process in which a dispute is brought before a court. Litigation can address a much broader range of issues than appraisal.
A roofing insurance dispute may involve litigation when the parties disagree about questions such as whether the policy provides coverage, whether an exclusion applies, whether the insurer properly handled the claim, or whether one party breached a legal obligation.
Litigation can involve attorneys, pleadings, discovery, depositions, expert witnesses, motions, hearings, and potentially a trial. Depending on the circumstances, a court may ultimately determine the parties’ legal rights and obligations.
Because litigation can address legal and factual issues beyond the dollar value of damage, it is generally more extensive than appraisal.
Appraisal vs. Litigation: The Key Difference
The simplest distinction is:
Appraisal generally determines the amount of a covered loss; litigation determines legal disputes and can address coverage, contractual obligations, liability, and other issues.
For example, if an insurer agrees that a roof is damaged and covered but values the loss at $200,000 while the property owner believes the covered loss is $500,000, appraisal may potentially be appropriate if the insurance policy allows it.
However, if the insurer argues that the roof damage is excluded from coverage altogether, that may present a coverage question that appraisal alone may not resolve.
In some situations, appraisal and litigation can also occur in connection with the same insurance dispute. The appropriate process depends on the policy language, the facts, and the issues actually being contested.
Why This Matters for Commercial Roof Claims
Commercial roof claims can involve substantial amounts of money, particularly when a building requires extensive restoration or complete roof replacement. Before agreeing to a particular dispute-resolution process, property owners should understand exactly what is being disputed.
Important questions may include:
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Is the disagreement about the amount of damage?
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Is the insurer disputing whether the damage is covered?
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Are the parties disagreeing about the scope of necessary repairs?
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Does the insurance policy contain an appraisal provision?
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Are there additional legal or contractual issues involved?
A qualified roofing professional can provide documentation, photographs, inspection findings, estimates, and other technical information that may help establish the physical condition and repair requirements of the roof. An attorney or qualified insurance professional can evaluate the legal and policy issues.
Bottom Line
Appraisal and litigation are not interchangeable. Appraisal is typically a narrower process focused on determining the amount of a covered property loss, while litigation is a broader court-based process that can resolve coverage, contractual, and other legal disputes.
For commercial property owners facing a disputed roofing insurance claim, understanding this distinction is important before deciding how to proceed. Proper roof documentation, detailed repair estimates, and a clear understanding of the insurance policy can all help clarify what is actually being disputed.
This article is for general educational purposes and is not legal or insurance advice. Insurance policies and state laws vary, so property owners should consult qualified professionals regarding a specific claim.
Related Questions
- What is the appraisal clause in a commercial property policy?
- What is an appraisal umpire and how is one selected?
- How long does the appraisal process typically take?
- Can an insurer’s engineering report be challenged?
- What is a notice of intent to litigate under Florida insurance law?
- What is the difference between an engineer’s report and a contractor’s estimate?
- What is the difference between a percentage deductible and a flat deductible?
- What are the current rules on assignment of benefits in Florida?
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