Disclaimer: This article provides general information only and does not constitute legal advice. Consult an attorney for guidance tailored to your situation.
Detailed Answer
Under South Dakota law, an appraisal clause gives you a formal process to challenge a low diminished value offer by your insurer. Although South Dakota statutes do not mandate appraisal, insurers commonly include an appraisal provision in their auto policies. You must follow your policy’s appraisal clause to trigger this process.
1. Review Your Policy’s Appraisal Clause
Locate the appraisal section in your policy. It sets out deadlines, notice requirements, and the roles of appraisers and the umpire. Commonly, you must provide a written demand for appraisal within 60 days of a coverage or amount dispute.
2. Send a Written Demand
Draft a clear letter stating that you invoke the appraisal clause to determine the diminished value of your vehicle. Include your claim number, policy number, a brief description of the loss, and a request for appraisal. Send this demand by certified mail or another trackable method.
3. Appraisers Select an Umpire
After your insurer appoints its appraiser, both appraisers must choose a neutral umpire. If they cannot agree within the time frame in your policy (often 30 days), either party may ask a court to appoint an umpire.
4. Conduct the Appraisal
The appraisers and umpire inspect your vehicle, review repair estimates and market data, and submit written statements of the vehicle’s diminished value. They base their determination on fair market value before and after the loss.
5. Binding Award
Under most policies, the appraisal award is binding on both you and the insurer. You may still contest coverage issues or bad-faith handling under South Dakota’s Unfair Claims Practices statute (see SDCL §58-33-18), but the appraisal binds the amount of diminished value.
Helpful Hints
- Double-check your policy for appraisal deadlines and notice requirements.
- Retain photos, repair estimates, and market comparables before losing them.
- Hire a qualified auto appraiser with experience in diminished value.
- Keep copies of all letters and proof of service such as certified mail receipts.
- Consult an attorney if the insurer resists appraisal or fails to cooperate.
- Track appraisal costs; many policies allocate fees to each party.