An insurance appraisal can be a valuable tool when policyholders and their insurers disagree on the value of a claim. This tool can help determine the amount of damage to the property because appraisers for both sides will perform a thorough investigation to help come to a final decision. However, these services are not free of charge, and, generally, each party involved must hire and pay the costs of their own appraiser. Understanding just how much insurance appraisal services can cost can help policyholders prepare ahead of time in the event they need one.
Commercial Property Insurance Appraisal Costs
Filing a commercial property insurance claim can be stressful for many reasons – especially if the claim is greatly undervalued. In these cases, an insurance appraisal can be conducted to reevaluate the claim and help determine a final claim award amount. Overall, the goal of an appraiser is to investigate, evaluate, and provide valuations on property damage to help settle insurance claims.
Under most policies, this process involves both the insurer and the policyholder appointing an appraiser. Most policies dictate that each party is responsible for paying its own designated appraiser, and the parties bear any other related expenses and the costs of an umpire equally.
Both appraisers can negotiate and reach an agreed-upon amount, but if they cannot agree, they will need to work together to choose a mutually acceptable umpire to make the final decision. The umpire chosen must also be a disinterested, impartial party with a good moral character and reputation. Once the umpire is selected, the appraisers will each present their loss assessment for the umpire to review. The umpire will then provide a written decision to both parties determining the final claim amount. However, it is important to note that even after an appraisal award is determined, the insurer could still deny the claim citing that the damage is not covered under the policy.
When it comes to the cost of an insurance appraisal, typically, most appraisers will outline their costs upfront so each party can have an idea of what to expect. In Texas, the cost of hiring an appraiser can vary widely, as the cost will take into account the location of the property, the property type, the damage that occurred, and how extensive the damage is. On average, commercial property insurance appraisals can cost roughly $4,000 to complete; however, this amount can vary widely based on the property’s condition. Because of this, the cost can increase to $10,000 or higher for more complex disputes. Therefore, policyholders should consider the size of the difference between their estimate and the insurers. If the difference in value is small, an appraisal may not be worth the cost.
Obtaining Legal Counsel for a Commercial Insurance Appraisal
The insurance claim process can be incredibly frustrating to navigate, particularly if an appraisal is needed to get a second valuation on the disputed claim. While invoking an appraisal clause can be effective for settling insurance claim disputes involving the amount of damage, if not done properly it can result in many headaches for the insured. Hiring legal counsel with experience in the insurance appraisal process can be incredibly helpful in these scenarios. Insurance coverage lawyers will give policyholders a better chance of obtaining a fair outcome for a complex disputed commercial claim.
Not only that but hiring an attorney early on can help policyholders get better insight into whether or not pursuing an appraisal is even in their best interest. This is because the process can quickly become costly, as appraisers are typically hired for larger dispute amounts. For smaller disputed claims, the outcome of the appraisal is often not worth the cost and can leave policyholders worse off than they were before.
Appraisers can also be incredibly difficult for insureds to find because they often prefer working for insurers due to the propensity for repeat business. The same can be said for finding impartial umpires as well. Additionally, one of the greatest disadvantages for policyholders pursuing an insurance appraisal is that the insurance company can – depending upon the policy terms – retain the right to deny the claim regardless, even after an appraisal award has been determined. This means that not only would policyholders spend months going through an appraisal and pay for an appraiser and potentially an umpire, but the insurer could still deny their claim anyways. This becomes an additional waste of time, money, and resources, ultimately creating an even greater imbalance of power between the policyholder and the insurance company. This makes it incredibly important to have competent and experienced legal counsel to help insureds navigate the appraisal process and receive what they are owed by their insurance providers.
Complex Appraisal Attorneys
At Raizner Slania, we know just how frustrating the claims process can be. These feelings are only exacerbated in the event an appraisal is necessary to resolve a disputed claim. Our experienced complex appraisal attorneys are leading the way in establishing a more positive and safe appraisal process for Texas consumers to counter the bad faith efforts of insurance carriers. Contact our office today to learn how our insurance attorneys can help guide you through a large and/or complex appraisal.