Navigating Insurance Appraisals: A Guide for Wisconsin Homeowners

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Most Wisconsin homeowners are unaware that their insurance policy contains an “appraisal provision” until after they have a loss that they believe their insurance company is trying to underpay. If that happens and the homeowner is working with claim professionals such as public adjusters, or a Wisconsin insurance claim attorney, the topic of appraisal may come up as a way to resolve the cost difference for the claim. Invoking apprisals; however, is not without risk and if not done properly, the results can be devasting for homeowners.

Adding to the complexity is the changing landscape of insurance coverage litigation. Across the country, several major insurance companies have begun actively challenging the availability of appraisals when requested by policyholders. Even when appraisals are initiated, disputes over outcomes have become a common battleground.

In this multi-part series, Murdock Law will provide an overview of insurance appraisals and the lessons from Wisconsin court cases.  In this initial installment, we will provide an overview of insurance policy provisions that govern appraisals and the pros and cons of appraisal from the policyholder’s perspective.

Understanding the Appraisal Provision in Your Wisconsin Insurance Policy

          Every first-party insurance policy that we have reviewed contains an appraisal provision. The provision will contain language similar to the following provision:     

“If you and we fail to agree on the amount of loss, either may demand an appraisal of the loss. In this event, each party will choose a competent appraiser within 20 days after receiving a written request from the other. The two appraisers will choose an umpire…. The appraisers will separately set the amount of loss. If the appraisers submit a written report of an agreement to us, the amount agreed upon will be the amount of loss. If they fail to agree, they will submit their differences to the umpire. A decision agreed to by any two will set the amount of loss.”

Farmers Auto. Ins. Ass’n v. Union Pac. Ry., 2009 WI 73, ¶10, 319 Wis. 2d 52, 768 N.W.2d 596

          Under this provision, both the insured and the insurance company will select their own appraisers. The two appraisers would then do their analysis and then attempt to agree on the amount of the loss. If the two appraisers are unable to resolve their differences, a third individual—an umpire—would then be appointed. The amount of the loss agreed to by 2 of the 3 individuals would be determinative as the amount of the loss.

Pros and Cons of Invoking Insurance Appraisals: What Homeowners Need to Know?

An appraisal presents both benefits and risks to both the insurance company and the policyholder. Understanding the pros and cons of the appraisal is crucial for making an informed decision about whether to invoke it.

          Pros of Insurance Appraisals:

Quick(er) Conflict Resolution:  If you and your insurance company can’t agree on the value of your claim, using an insurance appraisal can be faster than litigation to resolve the differences.

Increase The Claim Value without Lawsuits: Policyholders can use the appraisal process to increase the value of their claim without going through a long and expensive legal process.

Experts to Address Complex Damage Valuation instead of Jurors: Certain losses involve complex damage valuation issues, where the amount may depend on intricate construction methods, necessitate engineering assessments, or entail accounting complexities in the case of a business income claim.
Professional appraisers often excel in making complex determinations compared to non-expert juries.

Cons of Insurance Appraisals:

No Guarantee of Outcome: There’s no guarantee that the appraisal will go your way. Once made, the decision typically finalizes the amount of damages.

No Review of The Appraisal Result: Appraisal decisions as to the amount of the loss are typically binding. There are only narrow grounds for upsetting an appraisal decision:  “fraud, bad faith, a material mistake, or a lack of understanding or completion of the contractually assigned task.” 

Need a Big Dispute: Appraisals may make sense when there’s a big difference in what you and your insurance company think the amount of the loss is. Appraisals may not be economically viable for smaller disputes since the cost of the appraisal could exceed the dispute.

Lack of Rules:  There are few formal rules or laws for conducting appraisals. By their nature and design, appraisals are less formal than arbitration or court proceedings. Insurance companies can abuse this lack of formality. We’ve seen appraisals get dragged on for months while the insurance company’s appraiser delays inspections and/or reviews of the policyholder’s estimates.

Hard to Find Fair Appraisers: It’s not easy to find qualified appraisers who are willing to work for you. Many independent adjusters prefer working for insurance companies because they regularly might get more jobs from them.

Finding a Fair Umpire: Having the right Umpire will often make or break the appraisal result. Unlike some states, Wisconsin hasn’t witnessed an extensive culture of litigation over umpire appointments. However, for policyholders in Wisconsin, the challenge lies in identifying an impartial umpire for the appraisal. Unlike their insurance company, most individuals lack a curated list of potential umpires. As a result, homeowners are often unsure as to whether a fair umpire was selected until they see the result.

May Not Avoid Litigation: Even after conducting an appraisal, your insurance can argue that there is no coverage. Consequently, you could still wind up in litigation over coverage after an appraisal to determine damages.


The decision to request an appraisal provision should be based on the specific circumstances of the claim. When done correctly, they can lead to a quicker and less expensive resolution compared to litigation. However, this efficiency may pose a drawback for insurance companies aiming to retain claim payments for interest accrual. Both parties face a risk of dissatisfaction with the appraisal result, as there are few rules and no judicial oversight, leaving limited recourse for challenging the outcome. Homeowners may encounter difficulties if the appraisal process becomes prolonged or costs spiral out of control.

Where to Find Help?

Contact the attorneys at Murdock Law if you feel like you’ve been treated unfairly by your insurance company, or you’re just not sure where to start. We’ll double-check your insurance policy and work with you to make sure you’re getting what you deserve on your claim.

Additional Resources

The Murdock Law Blog addresses many insurance topics and is a great resource for policyholders.  In addition, we also recommend the policyholders check out the  United Policyholders of America, which is another great resource for consumers and also provides topic-specific answers for many common (and many uncommon) questions.  The Wisconsin Office of the Commissioner of Insurance (“OCI”) offers practical advice for Wisconsin Insurance Claims and is available to assist you with complaints or difficulties that you have with your insurer.  You can see the information on the web at

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