Appraisal is a short clause with a long history. Virginia’s insurance code builds an appraisal procedure into its standard fire policy provisions, and most homeowners and commercial property forms carry a version of it. Here is how a Virginia appraisal usually unfolds, step by step, and where files most often go wrong.
1. Spot the disagreement
Appraisal answers one question: what is the amount of loss? It fits when the insurer has accepted coverage but its estimate and your contractor’s number are far apart, because of missed scope, low pricing, matching or code items. If the insurer has denied the claim or says the damage isn’t covered, that’s a coverage dispute, and appraisal usually can’t resolve it.
2. Build the file
Before anyone demands appraisal, assemble the declarations page and full policy, the insurer’s complete line-item estimate, your own itemized estimate, dated photos, receipts for temporary repairs and all correspondence. A thin file is the most common reason appraisals disappoint. The readiness scorecard will show you what’s missing.
3. Make the written demand
Either party may demand appraisal. The demand should be in writing, identify the claim, state that the parties disagree on the amount of loss and invoke the policy’s appraisal condition. Send it in a way you can prove, and keep a copy. Some policies set a window to respond. Read yours before sending.
What a demand doesn’t do
Demanding appraisal doesn’t automatically pause other policy deadlines, including the time to file suit. Keep those dates on your calendar separately.
4. Name the appraisers
Each side selects its own appraiser, typically within 20 days of the demand. Most policies require that appraiser to be competent and disinterested, meaning no financial stake in the outcome beyond a fair fee. A contractor holding the repair contract may not qualify.
5. Select an umpire
The two appraisers choose a neutral umpire, often within 15 days. If they can’t agree, many policies let either party ask a court of record in the state where the property is located to appoint one. A good umpire understands construction pricing and has no ties to either side.
6. Work the differences
The appraisers inspect, compare scopes and work through the estimate item by item. Most of the gap is usually resolved here. Only items they can’t agree on go to the umpire, who reviews both positions, often inspects the property and decides each disputed item.
7. Sign the award
An award signed by any two of the three sets the amount of loss. A clear award form lists replacement cost, actual cash value and depreciation separately, and notes items set aside as coverage questions. The insurer then pays under the policy’s terms, minus the deductible and prior payments.
Where Virginia appraisals go wrong
- Demanding too early, before hidden damage is opened up and documented.
- Naming an interested appraiser, which gives the insurer grounds to challenge the award.
- Losing track of the suit deadline while the panel works.
- Vague award forms that don’t separate replacement cost from actual cash value.
- Using appraisal for a coverage fight that it can’t resolve.