Invoke an Insurance Appraisal Clause to Challenge a Low Diminished Value Offer in New York

Disclaimer: This article provides general information and does not constitute legal advice. Consult an attorney for guidance on your specific situation.

Detailed Answer

Diminished value refers to the loss in market value of your vehicle after repairs. If your insurer issues a settlement offer that you consider too low, you can enforce the appraisal clause in your policy. The appraisal clause is a contract term that lets you and your insurer appoint independent appraisers to value the loss. If the appraisers disagree, they select an umpire to decide. The final appraisal award sets the amount you should recover.

Follow these steps under New York law:

1. Review your policy. Find the appraisal clause. Most policies require you to submit a written demand for appraisal within a specified period (often 60 days after loss or denial).
2. Serve a written demand. Send a letter to your insurer stating your intention to invoke the appraisal clause. Include your policy number, claim number, and details of the dispute.
3. Select an appraiser. Choose a qualified vehicle appraiser. Your insurer will appoint its own appraiser.
4. Appraiser conference. Your appraiser and the insurer’s appraiser inspect the vehicle separately. They each submit a written estimate of the diminished value.
5. Umpire. If the two appraisers disagree on the amount, they select a neutral umpire. If they cannot agree on an umpire, ask a court in New York to appoint one.
6. Appraisal award. The three parties set the final amount. Insurer must pay that amount, subject to policy limits and deductibles, as required by NY Insurance Law § 3420.

This process resolves valuation disputes without litigation. You or your insurer can start it, and the award is binding.

Helpful Hints

• Act quickly. Note any deadline in your policy and state law.
• Document the condition of your vehicle before and after repairs.
• Obtain independent repair and valuation estimates.
• Keep detailed records of all correspondence with your insurer.
• If the appraisal award is still unsatisfactory, consider mediation or consult a New York attorney.