How appraisal works
The appraisal clause settles the damage and the amount of a loss without a lawsuit
Almost every homeowners and commercial property policy sold in Colorado contains an appraisal clause. It is short, it is binding, and most policyholders have never read it. This page explains what it does and does not do.
The clause itself
The wording varies a little by carrier, but the structure is always the same. If the policyholder and the insurer disagree about the amount of loss, either may demand appraisal in writing. Each side selects a competent, impartial appraiser. The two appraisers select an umpire. The appraisers each determine the amount of loss. Where they agree, that is the amount. Where they do not, they submit their differences to the umpire, and a decision signed by any two of the three is binding.
Damage and amount, not the policy. Appraisal answers what the damage is and what it costs to put the property back. In Colorado the panel may also decide what caused the damage when that is in dispute, for example whether a roof shows hail impact or wear. What appraisal does not do is interpret the policy: whether an exclusion applies, whether the claim was reported in time, or what the policy owes. Those are coverage questions. If that is where a claim is stuck, an attorney is the right first call, and we will say so rather than take the file.
The three roles
| Role | Selected by | Responsibility |
|---|---|---|
| Policyholder's appraiser | The policyholder | Inspect, measure and document the loss; prepare an estimate; compare it with the carrier appraiser's; present the differences to the umpire if needed. |
| Carrier's appraiser | The insurer | The same, from the carrier's side. Often an independent appraiser or a senior adjuster. |
| Umpire | The two appraisers together, or a court if they cannot agree | Decides only the items the appraisers could not settle. Usually an experienced appraiser, engineer, contractor or retired judge. |
Colorado's Division of Insurance expects party-appointed appraisers to be fair and competent, and the Colorado Supreme Court has held that an appraiser may not act as an advocate for the party who appointed them. Our estimates are prepared the same way whether a homeowner or a carrier appointed us.
How to invoke appraisal
Confirm it is a dispute about the damage or the amount
You have a written estimate, payment or denial from the carrier and a materially different view of the damage or its cost from a qualified contractor or your own appraiser. The disagreement is not about policy wording such as an exclusion or late notice.
Select your appraiser first
You will name them in the demand letter. Ask how they document a loss and whether they have worked the other side. A good appraiser will also tell you when a claim is not a good fit.
Send the written demand
A one-page letter to the claims examiner citing the appraisal provision, stating that you dispute the amount of loss, and naming your appraiser with contact information. Keep a copy and send it in a way you can prove was received.
The carrier names its appraiser
Most policies allow each side 20 days. The two appraisers then agree on an umpire at the outset so no one is scrambling later.
Inspection, estimates, award
Expect 30 to 90 days from the letter to a signed award. Agreement between the two appraisers is the most common ending.
Common questions
The full FAQ covers many more, organized by topic.
Can I still use my own contractor after appraisal?
Yes. The award sets the amount of loss. Who does the work, and for how much, is between you and your contractor.
What if the carrier refuses to participate?
Most policies make appraisal mandatory once either side demands it properly. A carrier that ignores a proper demand is usually in breach of its own policy, and that is the point at which an attorney becomes useful.
Does appraisal waive anything?
Appraisal settles the amount. It does not waive the carrier's coverage defenses or your other rights under Colorado law. Ask an attorney about anything beyond the amount.
What about depreciation and the deductible?
The award typically states the replacement cost value and the actual cash value. The carrier pays according to the policy: actual cash value first, recoverable depreciation when the work is completed, less the deductible. Appraisal does not change those terms; it fixes the numbers they apply to.
Is a public adjuster the same thing?
No. A public adjuster is licensed to negotiate and settle the claim on your behalf. An appraiser is appointed only after a dispute about amount and must be impartial. Some claims use both. We are not public adjusters.
Not sure whether your claim fits?
Send the carrier's estimate and your contractor's to Appraisals@HeidmannAndAssociates.com. We will reply within one business day.