Detailed Answer
What Is an Appraisal Clause?
An appraisal clause is a contract provision in your auto policy that lets you and your insurer use independent experts to set the value of a loss when you disagree on the amount of diminished value. This process stays out of court and speeds resolution. Most Montana policies follow standard forms that include this clause.
Where to Find It in Your Policy
Locate the “Appraisal” section under the Loss Settlement or Coverage Conditions of your declarations. It typically explains:
• How to demand appraisal
• Deadlines for each step
• How appraisers and an umpire are selected
• How the final award binds both parties
Steps to Invoke the Appraisal Clause
- Review Your Policy Language
Confirm the exact notice requirements and timeframes for invoking appraisal. Most policies require a written demand before or shortly after you reject the insurer’s offer. - Send a Written Demand for Appraisal
Draft a clear letter stating: “I invoke the appraisal clause under Section [X] of my policy to determine the diminished value of my vehicle.” Include:
– Your name, policy number, and claim number
– A statement that you disagree with the insurer’s offer
– A request that the insurer appoint its appraiser within the time specified - Select Your Appraiser
Choose a qualified loss appraiser experienced in diminished value assessments. Provide their name and contact information to the insurer in your demand letter. - Insurer Appoints Its Appraiser
Under Mont. Code Ann. § 33-15-303, once you demand appraisal, the insurer must appoint its appraiser within the policy’s timeframe. Mont. Code Ann. § 33-15-303 - Appraisers Select an Umpire
If the two appraisers cannot agree on the diminished value, they must select a neutral umpire. If they cannot agree on the umpire, either party may ask a district court to appoint one. - Exchange Documentation and Inspect the Vehicle
The appraisers inspect the vehicle, review repair records, market data, and any other evidence of diminished value. They then determine an agreed-upon value or submit separate determinations to the umpire. - Receive the Appraisal Award
Once the two appraisers or the umpire agree, they sign a written award. Under Mont. Code Ann. § 33-15-505, this award binds both you and the insurer. Mont. Code Ann. § 33-15-505 - Enforce the Award if Necessary
If the insurer refuses to pay the appraisal award, you can file a petition in Montana district court to confirm the award as a judgment.
Helpful Hints
- Act promptly. Missing policy deadlines can waive your appraisal right.
- Choose an appraiser with diminished value specialty in Montana.
- Keep copies of all correspondence, estimates, and inspections.
- Consider mediation before appraisal to narrow issues.
- Review Montana’s Unfair Claims Practices Act if the insurer stalls.
- Consult a lawyer if the insurer refuses to comply with the appraisal process.
Disclaimer: This article is for educational purposes only and does not constitute legal advice. Consult a licensed attorney in Montana for guidance specific to your situation.