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The appraisal process is one of the more confusing sections of any policy. When and how an appraisal can and should be used is often the source of confusion. The policy language is virtually identical across lines of business with very minor differences. In the homeowners form once a demand for appraisal is made both parties have twenty days to choose a competent and impartial appraiser; in the building and personal property form no time frame for selecting appraisers is given.

One of the first areas of confusion is exactly when an appraisal is appropriate. The appraisal is to be used when the insured and carrier disagree on the amount of loss, not whether or not coverage exists. If the insured thinks there should be coverage for water in the basement and the carrier has denied the claim for water in the basement, an appraisal will not be useful in this situation. The appraisal does not make any determination of coverage. However if both the insured and the carrier agree that the loss is covered, but disagree on the cost of repairs, that is when an appraisal should be used. An insured has damage to the kitchen, and has an estimate that the cost to repair the kitchen to its former condition is $10,000. The carrier’s estimate is for $5,000, and the carrier has stated that is all it will pay. The two parties are at a standstill, and this is where an appraisal comes in. Either party can demand an appraisal of the loss. Some forms require the demand to be made in writing, others are silent on the matter.

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Christine G. Barlow, CPCU

Christine G. Barlow, CPCU, is Managing Editor of FC&S Expert Coverage Interpretation, a division of National Underwriter Company and ALM. Christine has over twenty-five years’ experience in the insurance industry, beginning as a claims adjuster then working as an underwriter and underwriting supervisor handling personal lines. Before joining FC&S, Christine worked as an Underwriting Supervisor for Maryland Auto Insurance Fund, and as Senior Underwriter/Underwriter for companies Montgomery Mutual, Old American, Charter Group, and Nationwide. The publications Christine has written or edited include Personal Lines Unlocked: The Key to Personal Lines Underwriting, Personal Lines Endorsements Coverage Guide, Commercial Flood Insurance Coverage Guide, Personal Flood Insurance Coverage Guide, Homeowners Personal Lines Coverage Guide 5th Edition, Personal Umbrella Coverage Guide 2nd Edition, and Condominium Coverage Guide 2nd Edition, all published by the National Underwriter Company. Christine regularly writes for Claims Magazine and National Underwriter Magazine. Christine regularly presents and moderates webinars on a variety of topics and is an experienced presenter. Christine graduated cum laude from Towson University, Maryland, with a degree in Sociology/Psychology with a concentration in Gerontology.

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