Disclaimer: This article provides general information and does not constitute legal advice. Consult an attorney to discuss your specific situation.
Detailed Answer
Understanding Appraisal Clauses in Minnesota Insurance Policies
Most Minnesota auto and property insurance policies include an appraisal clause. This clause sets out a streamlined process to resolve disputes over repair costs or diminished value. It avoids litigation by using independent appraisers and an umpire to set the fair value.
1. Review Your Policy
Locate the appraisal section in your declarations page or policy booklet. Note these key items:
- Time limits for invoking appraisal (often 60 days after a dispute).
- Procedure for submitting a written demand.
- Requirements for selecting appraisers and an umpire.
2. Send a Written Demand
Prepare a written appraisal demand. Include:
- Your name, policy number, and claim number.
- A clear statement that you invoke the appraisal clause to determine the diminished value of your vehicle.
- Date, signature, and delivery receipt (use certified mail or email with read receipt).
3. Appraiser Selection and Umpire Appointment
Once the insurer receives your demand, both sides pick independent appraisers. If those appraisers can’t agree on value, they select a neutral umpire. If they cannot agree on an umpire within the policy’s deadline, either party can ask a court to appoint one.
4. Conduct the Appraisal
The appraisers inspect the vehicle, review repair estimates, and exchange documentation. The umpire steps in when there is a tie. Together, they issue a written award specifying the vehicle’s diminished value.
5. Binding Decision and Payment
Under Minnesota law, the appraisal award is binding on both you and the insurer. The insurer must pay the amount awarded, less any applicable deductible. Courts will enforce appraisal awards as final determinations of value.
6. If the Insurer Refuses to Comply
Insurers in Minnesota must comply with appraisal clauses or risk an unfair claim settlement practice. Under Minn. Stat. § 60A.0813, it is unlawful for an insurer to unreasonably delay or deny appraisal. You may file a complaint with the Minnesota Department of Commerce or seek judicial enforcement.
Helpful Hints
- Keep copies of all correspondence and documentation.
- Hire a qualified appraiser experienced in diminished value claims.
- Track deadlines carefully to avoid waiving your right to appraisal.
- Consider mediation if appraisal does not resolve all disputes.
- Contact the Minnesota Department of Commerce for consumer assistance.