Insurance Valuation Clause… A Better Chance for Policyholders to Settle an Insurance Claim Dispute!


Many homeowners and business owners are at odds with their insurance company’s analysis of their insurance claims. However, most are unaware that they can challenge the insurance company’s determinations about the insurance valuation clause! Find out about the steps you need to take to contest the settlement of your insurance claim.

Many homeowners and business owners are at odds with their insurance company’s analysis of their insurance claims. However, Most do not know that they can challenge the insurance company’s determinations about the insurance valuation clause! Even if the policyholder (you) submits an estimate from a contractor, receipts for repairs or materials, or even photos showing the damage that the insurance company hasn’t considered for repairs, they still won’t budge.

Most policyholders do not know how to dispute and resolve their claims with the insurance company. Policyholders have a choice and a voice within their policy for this purpose. This is called a review clause – also known as a review clause. Don’t let that put you off. This may seem like an imaginative clause that would require a law degree to understand. However, an easy way to understand the clause is that it is the insurance industry’s version of arbitration. Although similar, the Evaluation Clause is NOT arbitration or mediation and the arbitrator is not an arbitrator, mediator, or judge. 

Meager; Arbitration requires attorneys and litigation, whereas insurance valuation does not require attorneys or litigation. Arbitration is a dispute between two parties for any reason, while the insurance valuation clause only concerns disputes between the “value” of a commodity – be it a car, plane, train, sofa, house, commercial building, etc.

Most policies have an appraisal clause.

If you feel you are at an impasse with your insurance company and want to resolve your claim, you will need to check your policy for the evaluation clause. Most policies will have the provision listed in the What to do after a Claim section or the Conditions section of the policy. Below is an example of a typical insurance valuation clause found in most policies. Note that policies may be different in each state.

When one of the two submits a written request for expertise, each selects a competent and independent assessor. must inform the other of the identity of the expert within 20 days of receipt of the written request. The two experts then select a competent and impartial arbitrator. If the two experts cannot agree on an arbitrator within 15 days, you or we may ask a judge at the state court where the home is located to appoint an arbitrator. The experts then determine the amount of the damage. If the experts do not reach an agreement within a reasonable time, they shall submit their disputes to the A written agreement signed by two of these three persons shall determine the amount of the damage.”

Okay, but how does the insurance valuation clause work?

The valuation clause allows the policyholder (you) to hire an independent appraiser to determine the value of the claim. In return, the insurance company will also commission its own independent appraiser. The two reviewers then meet and select an arbitrator. The umpire is basically the umpire, or whatever you might call the judge. In case of disagreement between the two reviewers, they can present their differences to the reviewer who will decide.

IN ORDER; So far so good, the basics of the insurance valuation process are beginning to fall into place. We have an independent assessor for the policyholder. We have an independent assessor for the insurance company. Finally, there is a referee. These three people are called the Evaluation Committee. The purpose of the valuation committee is to assess or determine the amount of the loss. The Damage Amount is the total dollar amount required to return the damaged property to its original condition, either by repair or replacement.

Once the appraisal committee is established, the policyholder’s chosen appraiser and the insurance company’s chosen appraiser review the paperwork, the estimates, and the differences between them. The two independent assessors will attempt to discuss and resolve the damage and cost differences. For example; The insurance company may determine that the brick in a home does not need to be replaced. While the insured’s contractor or surveyor says it needs to be replaced. the brick to its original pre-damage condition will be.

One of the advantages of this process is that the two independent appraisers were not the subject of disputes and anger between the insured and the insurance company. The appraisers actually only have the amount of damage and the difference between the two estimated values. They don’t have the prior baggage or anger that led to the review. The process was designed to allow these two people, who have no interest in the outcome, to discuss an agreement based on the facts presented to them.

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