Setting the Amount of Loss

The two appraisers will meet together and hopefully agree on the scope of damages. They will then independently prepare an estimate for the repair of these damages. Each appraiser will then separately set the amount of loss. In a perfect world, the two appraiser's estimate of damages should be close in value, but experience has taught me this is seldom the case. There may be some negotiation between these two individuals in an attempt to reach a compromise. If they can agree on the amount of loss, they will then submit an award to the insurer. If they cannot agree on an amount of loss, they will then submit their differences to the umpire.

When the two sides cannot agree on the amount of the loss, they will then ask the umpire to participate in the appraisal dispute. Often the two appraisers will send the umpire estimates, invoices, receipts, engineer's reports, and other documentation supporting the costs they have assigned. He will review the information and then attempt to discover wherein lies the disagreements. It may be possible, that after review of these documents, the umpire could come to agreement with one of the appraisers on the amount of the loss without visiting the loss location, but the courts have frowned upon this practice. More than not, it will be necessary for the umpire to meet at the loss location with both appraisers. Remember this dispute is about a disagreement in price, scope, or both. There is little value in scrutinizing a cost of a specific item when that cost is not in dispute. An experienced umpire should be able to review both of the appraiser's estimates, identify the differences, make a determination either to exclude or to include these differences of loss, and to set an amount for repair or replacement of damages and covered expenses.

A decision agreed to by any two will set the amount of loss.
An agreement in price by any two or three persons on the appraisal panel will set the amount of the loss. A document called an award is then prepared by one of the three parties delineating the total amount of each Coverage ( Coverage A, Coverage B, Coverage C, etc...) set by at least two individuals on the appraisal panel. If any of the Coverages have sub-limits, it is best to address those also. I believe it is very important at this point to make clear in the award that the amounts stated are the full amounts allowed under each Coverage. It is the insurance company's responsibility to apply the correct deductible and subtract any prior payments. Also, care should also be taken to state on the award when a specific Coverage was not addressed or considered by the appraisal panel.