The short version
If you and your insurer agree that damage is covered but disagree on what it costs to fix, your policy probably offers a way out that does not involve a courtroom. It is called the appraisal clause. Almost every homeowners, farm, and commercial property policy written in North Dakota includes one, though the wording varies from carrier to carrier. This guide explains how the clause typically reads, how the process works in practice, and where its limits are.
What the clause usually says
A typical appraisal clause runs only a paragraph or two. Stripped to its essentials, it says something like this: if you and we fail to agree on the amount of loss, either may demand an appraisal of the loss. Each party then chooses a competent and disinterested appraiser within a set number of days. The two appraisers choose an umpire, and if they cannot agree, either party may ask a court to choose one. The appraisers separately set the amount of loss, and if they agree, that amount is binding. If they do not, they submit their differences to the umpire, and a decision agreed to by any two will set the amount of loss.
The clause usually ends by assigning costs: each side pays its own appraiser and splits the umpire and other expenses equally. Some policies add a line stating that the insurer keeps its right to deny the claim even after an award.
Key phrases to look for
- “Amount of loss.” This is the scope of appraisal. It is about value, not coverage.
- “Competent and disinterested.” Your appraiser needs relevant knowledge and no stake in the outcome beyond a fee.
- Time limits. Watch for the number of days to name an appraiser and to agree on an umpire.
- Court appointment. The clause usually names a court of record where the property is located as the backstop for picking an umpire.
Who can invoke appraisal
Under most clauses, either side may demand appraisal. Policyholders usually invoke it when an estimate seems too low; insurers sometimes invoke it when a contractor’s bid seems too high. Some policies make appraisal available only if both parties agree, and some surplus lines policies, which are common in North Dakota because the state has no FAIR plan or wind pool, have different language entirely. Read yours before assuming.
Is appraisal the right tool?
Appraisal fits best when the disagreement is about numbers: the number of squares on a roof, the price of siding, whether a ceiling needs to be replaced or only painted, how much overhead and profit applies. It is a poor fit when the insurer says the damage is not covered at all, such as a claim the carrier attributes to wear and tear, or when the dispute is about how the claim was handled.
The gray zone is causation. If the insurer agrees hail hit the roof but argues some of the damage is old, a panel may end up evaluating which damage belongs to the covered event. How far appraisers can go on causation is a legal question, and the answer depends on the policy language and North Dakota law. If causation is the heart of the dispute, talk to a North Dakota attorney before demanding appraisal.
How the process unfolds
- Document the gap. List each disputed item and the dollar difference.
- Send a written demand. Identify the policy, claim, date of loss, and that you disagree on the amount of loss.
- Name your appraiser. Do this within the window in your policy.
- Agree on an umpire. The appraisers try first; a court can appoint one if needed.
- Inspect and estimate. Each appraiser builds an independent estimate.
- Negotiate. The appraisers resolve what they can.
- Umpire decides the rest. Any two signatures make the award.
- Payment. The insurer pays under the policy terms.
For a fuller breakdown of each stage, see how an appraisal unfolds.
What an award does and does not do
An award fixes the amount of loss. It does not erase the deductible, policy limits, or depreciation holdback. If your policy pays actual cash value first and the rest after repairs, that structure still applies. If the insurer has a coverage defense it reserved, it may still raise it. And an award does not decide whether the carrier owes anything beyond the policy, such as damages for bad faith; that is for a court.
Here is an illustrative example, with made-up numbers: suppose a carrier estimated a roof at $14,000 and the policyholder’s contractor bid $26,000. If the panel awards $21,000 on a replacement cost basis, the insurer would typically subtract the deductible and prior payments and might hold back recoverable depreciation until repairs are done. The award is a starting figure, not a check amount.
North Dakota timing issues
Two features of life here shape appraisal. First, the weather. A June hailstorm might not be inspected by a panel until fall, and by then snow can cover the roof. Panels often agree in writing to use earlier photos and complete any roof inspection when conditions allow. Second, deadlines keep running. Suit-limitation periods come from the policy and state law, and appraisal may not pause them. Check your policy and confirm with a North Dakota attorney rather than assuming you have time.
Distances matter too. With 53 counties and a lot of open road between them, the umpire pool in western North Dakota is smaller than in Fargo or Bismarck. Starting the umpire conversation early avoids a scramble.
Practical tips before you demand appraisal
- Get a complete, certified copy of your policy, including all endorsements.
- Request the insurer’s full estimate and photos.
- Keep a log of every call and letter.
- Mitigate further damage and keep the receipts.
- Ask any appraiser you consider how they are paid and whether they have worked for your insurer.
North Dakota Insurance Appraiser represents policyholders in appraisal across the state and also serves as umpire. We are not attorneys or public adjusters, and we cannot promise any outcome. If you are weighing whether appraisal fits your claim, our appraisal representation page explains how we work.