When an insurance claim involves significant property damage, disagreements can arise between the policyholder and insurer over how much the repairs should cost. For Florida commercial and residential property owners, appraisal can be an important option when the dispute concerns the value or scope of covered damage. However, appraisal is not appropriate for every insurance disagreement.
A policyholder should generally consider invoking appraisal when the insurer and insured agree that a covered loss exists but cannot agree on the amount of the loss or the scope of damage. Florida’s Department of Financial Services explains that appraisal may be available when the parties cannot agree on the value or scope of damage, provided the insurance policy contains an applicable appraisal clause.
What Is Insurance Appraisal?
Insurance appraisal is a dispute-resolution process established by the insurance policy. Typically, the policyholder selects an appraiser, the insurance company selects its own appraiser, and the two appraisers attempt to reach an agreement regarding the disputed amount. If they cannot agree, an umpire may be selected to resolve the remaining valuation dispute.
The exact procedure depends on the language of the policy. Therefore, a policyholder should review the appraisal provision before making a formal demand.
When Does Appraisal Make Sense?
Appraisal may be worth considering when there is a substantial disagreement about repair or replacement costs.
For example, suppose a Florida commercial building suffers storm damage to its roof. The insurer determines that $150,000 of roof repairs are appropriate, while a qualified roofing contractor documents $300,000 in necessary covered repairs. If both sides agree that the storm caused covered damage but disagree significantly about the amount of the loss, appraisal may provide a mechanism for resolving the valuation dispute.
Appraisal can also become relevant when the parties disagree about the scope of physical damage, such as how much roofing membrane, insulation, flashing, decking, or other affected material must be repaired or replaced. Florida’s Insurance Consumer Advocate specifically identifies value and scope of damage as matters that appraisal can address.
When Should You Avoid Invoking Appraisal Too Quickly?
Appraisal is not necessarily the right tool when the fundamental dispute is about coverage, policy exclusions, causation, or whether the insurer owes anything at all.
For example, if an insurer says a roof leak resulted entirely from long-term deterioration and therefore is excluded, while the policyholder believes a covered hurricane caused the damage, the primary disagreement may be about coverage or causation rather than valuation. Appraisal may not resolve that legal or contractual question.
Because invoking appraisal can affect other dispute-resolution options and may create binding consequences under the policy, policyholders should understand the potential implications before making a demand. Florida’s Department of Financial Services notes that appraisal results are final under its described process and that the parties must comply with the appraisal outcome.
What Should a Policyholder Do Before Invoking Appraisal?
Before requesting appraisal, a property owner should:
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Read the insurance policy’s appraisal clause.
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Obtain a detailed estimate of the necessary repairs.
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Document the disputed damage with photographs, reports, and measurements.
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Compare the insurer’s estimate with the contractor’s or consultant’s estimate.
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Identify whether the disagreement concerns price, scope, coverage, or causation.
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Determine whether policy deadlines or procedural requirements apply.
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Consider consulting an insurance professional or attorney when the dispute is substantial.
For major commercial roofing claims, detailed documentation can be especially important because differences in scope can involve roof assemblies, insulation, decking, flashing, coatings, drainage components, code-related work, and other building elements.
Appraisal Is a Tool, Not a Guarantee
Invoking appraisal does not automatically mean the policyholder will receive the amount requested. The process is designed to resolve eligible disputes over the amount or scope of loss according to the policy’s terms.
Florida law also recognizes appraisal as part of the property-insurance dispute framework. For example, Florida Statute §627.70151 addresses conflicts of interest involving appraisers and umpires in certain property insurance appraisal proceedings.
Bottom Line
A policyholder should consider invoking appraisal when a covered property loss has occurred and the major unresolved disagreement is the amount or scope of the damage, provided the policy contains an applicable appraisal clause. It is particularly worth evaluating when the insurer’s estimate is substantially lower than credible repair or replacement estimates.
For a Florida roofing claim, the best first step is to carefully review the policy, document the roof damage, compare competing estimates, and determine whether the dispute is truly about valuation or instead involves coverage and causation. For significant claims, professional insurance or legal guidance can help determine whether appraisal is the appropriate next step.
Related Questions
- How long does the appraisal process typically take?
- What is an appraisal umpire and how is one selected?
- Can an insurer’s engineering report be challenged?
- What is coinsurance and how can it reduce a roof claim payout?
- Does insurance cover commercial roof replacement in Florida?
- What is a sworn proof of loss and when must it be submitted?
