How Much Does An Insurance Appraisal Cost?

The cost of hiring an appraiser can vary widely. During the vetting process, it is important that you understand your appraiser’s fees, whether a retainer is necessary, and if there is a not-to-exceed amount. Hiring the wrong appraiser who does not have the necessary skills to properly appraise your claim can lead to decreased outcomes for your appraisal. Hiring the most cost-effective individual in this instance is not the deal you want. A good appraiser has a structured compensation package, and they advise you of potential out-of-pocket costs that you may incur during the appraisal process.

Appraiser Fee

Each appraiser maintains their own billing amount. Hourly rates can range from $100 to $350. In most states, your appraiser cannot charge a flat rate for the appraisal; however, in states like New York, they can. Understanding your state statutes and guidelines around the appraisal process is recommended. This ensures you are being accurately charged for services rendered. States requiring an hourly rate do this as your appraiser is required to be impartial. An appraiser charging a percentage of the total claim outcome can lead the carrier to challenge the appraiser’s impartiality, creating an opportunity for the final award to be contested.

Your appraiser may also include an upfront retainer to be applied to their hourly rate. Typically, this is an amount apportioned to half of the anticipated costs for your appraiser’s services. It is recommended that you obtain a time sheet recording the appraiser’s hours worked. This verifies whether additional funds are required before applying additional amounts to the retainer and/or final costs.

In negotiation with your appraiser, it is in your best interest to negotiate a not-to-exceed amount. The not-to-exceed language will be included in the contract you sign with your appraiser. An important thing to note is that you do not want the not-to-exceed to limit the amount of effort your appraiser places on your claim. Your appraiser should be incentivized to maintain great vigor in concluding your appraisal. A low not-to-exceed amount can inhibit this process and reduce the overall outcome of your claim.

Legal Expenses

There are additional expenses you may incur throughout the appraisal process. In the initial appraisal process, your appraiser and the insurance company appraiser must reach a mutual agreement for an Umpire. If they are unable to agree on an umpire, a court-appointed umpire is required. To go through this process, an attorney working on your behalf is required. Ensuring the correct umpire is on the panel for your appraisal is essential. A carrier-influenced umpire leads to diminished claim outcomes, and using the court-appointed umpire process can greatly benefit the appraisal. Therefore, the cost of an attorney can outweigh that of a carrier-influenced umpire. Typically, attorney fees for this process range from $2,500 to $5,000. This varies state by state.

Experts

The attorney is involved in the initial process before your appraisal is underway. Experts during the appraisal process are recommended by your appraiser to ensure an appropriate scope is applied to your claim. Engineers, Architects, Hygienists, Inventory Specialists, and other experts may be necessary. You may be successful in seeking compensation from your carrier for associated expert fees, and/or costs may be split. Before hiring an expert, work with your carrier adjuster to determine whether they will compensate for the expert’s services. You may also need to seek reimbursement within the appraisal award and/or after the appraisal process.

Your carrier may have preferred vendors they utilize as experts. Preferred vendors typically are carrier-influenced, with outcomes favoring the carrier’s position. Just as you vetted your appraiser, ensure all potential experts are vetted as well.

Closing

It is in your best interest to understand all specific and potential costs associated with your appraisal. Hiring the incorrect appraiser, attorney, or expert can heavily influence the outcome of your claim. Seeking a deal or a low-cost appraiser is typically not recommended, as it often results in low-level work and limited negotiation, which is undesirable.