For What It's Worth Wisdom and Insight from the Auto Appraisal Group

Invoking the Appraisal Clause after a Total LossInvoking the Appraisal Clause

You made your total loss claim and your insurance company came back with a settlement offer that is simply unacceptable. You can send pre-loss descriptions and receipts for maintenance and current comparables in an attempt to negotiate. However, if they still won’t offer a more appropriate amount, what do you do? One way to address the issue prior to taking legal action is to invoke the Appraisal Clause.

What is the Total Loss Appraisal Clause?

In the event that your insurance company offers you significantly less to settle your claim than seems compensatory, you or your insurance company may invoke the Appraisal Clause. The party invoking the clause will advise the other party that, based on the inability to reach a mutually agreeable settlement on the total loss, an independent appraisal is necessary. (For complete details on the process, you want to check the “Damage to Your Auto” section of your insurance policy.)

What is the Total Loss Appraisal Process?

Once your notice or letter has been received and accepted by the insurance company, both parties will need to choose an impartial appraiser to assess the value prior to the total loss incident. The insurance company is responsible for paying their chosen appraiser, and you are responsible for any fees for the appraiser you choose. It is absolutely vital that the appraiser you choose be a third party who has extensive knowledge of vehicle values and the total loss appraisal process. An appraiser who is experienced and well-versed in the total loss appraisal process can insure that you receive the proper settlement no matter who has invoked the appraisal clause and can save you time as the process continues.

In many cases, your appraiser and the appraiser for the insurance company will compare findings and come to an agreement about what the proper settlement amount should be. Or it may be necessary for the two appraisers to select an “umpire”. The umpire is yet a third appraiser who, in the event that the initial two appraisers cannot reach an acceptable agreement about settlement value, will be part of the final decision.  In the event that an umpire is necessary, you and the insurance company split the expense equally.

Invoking the Appraisal Clause after a Total LossWhen should I invoke the Total Loss Appraisal Clause?

The Appraisal Clause should not be employed just because your insurance company offered less in settlement for your totaled vehicle than you expected. Smaller differences are rarely worth the effort, and any proceeds gained will likely be spent on fees to complete the process. If, however, the insurance company responds with a settlement offer that differs by thousands of dollars from what you expect to receive based on the prior value of the vehicle, the Total Loss Appraisal Clause can be an effective way to reach an acceptable settlement without the involvement of the courts.

Invoking the Appraisal Clause when your car has been declared a total loss, can also be risky, particularly if you are in a hurry. Some insurance companies have time limits regarding the total loss claim process, and you also may find it challenging to find a certified appraiser. Furthermore, it can take some time for both appraisers to agree on an umpire. An appraiser who is familiar with the Appraisal Clause process can help speed up the total loss claim settlement somewhat, but even in ideal cases, you must wait for both appraisers to inspect the vehicle and to communicate with one another about their findings.

How do I find the right Total Loss Appraiser?

Choosing an appraiser can be a difficult task for insured vehicle owners. You are required to find an impartial, experienced total loss appraiser. An appraiser who is unfamiliar with the Appraisal Clause relating to a totaled vehicle can cause significant delays and even cause protracted litigation. On the other hand, an appraiser who is well-versed in the process can add significant value to your claim and minimize the amount of time spent reaching a mutually agreed settlement.

It is important to note that the result of a Total Loss Appraisal Clause settlement can be very difficult to dispute. Again, it is essential that you employ an appraiser who understands the process and has experience in the accurate assessment of vehicle values to ensure that you receive the correct settlement. A certified appraiser can protect you from being forced to accept a settlement that is blatantly wrong.

Vehicle appraisers at AAG who perform total loss appraisal research use current market comparables and database resources to determine the value of your vehicle prior to loss. Certified AAG appraisers are trained to assess your car’s unique characteristics and provide professional, impartial findings in a fully-documented, certified appraisal report. Choosing AAG is your best first step toward reaching a fair, total loss claim settlement in the most cost-effective manner. Visit our website to learn more about how to get started today!