Why appraisal exists
Most property policies sold in North Dakota contain an appraisal clause. It gives the policyholder and the insurance company a way to settle a disagreement about the amount of a covered loss without going to court. Instead of a judge and jury, a small panel of two appraisers and, if needed, an umpire works through the numbers. The process is usually faster and less expensive than litigation, but it is still a formal procedure with rules, deadlines, and consequences.
The eight stages below follow a typical appraisal from the first sign of disagreement to a signed award and payment. Your policy controls the details, so read your own appraisal clause alongside this outline.
The eight stages, from disagreement to payment
1. Define exactly what’s disputed
Appraisal works best when everyone knows exactly what is in dispute. Before anything else, compare the insurer’s estimate with your contractor’s bid or an independent estimate. Identify which line items are missing, which quantities differ, and where unit prices are too low. If the insurer is saying a part of the damage is not covered at all, that is a coverage question, and appraisal may not be the right tool for it.
2. Written appraisal demand
Appraisal is normally started by a written demand from either party. A good demand identifies the policy, the claim number, the date of loss, and the fact that the parties disagree on the amount of loss. Some policies require that the demand be sent to a particular address or within a certain time after the disagreement arises. Keep proof of delivery.
3. Both appraisers are appointed
Most clauses give each side a short window, often around 20 days, to name its appraiser. The policy typically calls for a “competent and disinterested” appraiser, meaning someone who has the right knowledge and no financial stake in the outcome beyond a reasonable fee. Each side pays its own appraiser.
4. Umpire selection
The two appraisers then try to agree on an umpire, a neutral third person who only steps in if the appraisers cannot agree. If they cannot settle on a name within the time the policy allows, either party can usually ask a court of record in the area where the property sits to appoint one. Umpire costs are commonly split equally between the parties.
5. Inspection & independent estimates
Each appraiser inspects the property, reviews photos, the carrier’s estimate, adjuster notes, and any contractor bids, and then prepares an independent estimate. On a roof, that means measuring slopes, counting layers, checking pitch, and confirming accessories like drip edge, starter, and ice and water shield. Inside, it means tracing moisture, documenting finishes, and pricing what it takes to restore them.
6. Appraiser negotiation
The appraisers compare their estimates line by line. Many differences resolve quickly once both sides see the same measurements and photos. Others take more discussion: whether an elevation of siding needs to be replaced for a reasonable match, whether overhead and profit belongs on the claim, or how much a specialty trade really costs in a rural county. When the two agree on every item, they sign an award together and the umpire is not needed.
7. Umpire review
Items the appraisers cannot settle go to the umpire. The umpire reviews each side’s position, may inspect the property, and decides a value for each disputed item. Umpires generally work within the range the two appraisers present, though the exact approach varies.
8. Signed award & payment
An award signed by any two of the three panel members sets the amount of loss. The insurer then pays according to the policy, which means the deductible, any depreciation that is not yet recoverable, prior payments, and policy limits still apply. The award is about dollars; it does not change what the policy covers.
How umpire disputes get resolved
The two-of-three rule is the heart of the process. If both appraisers agree, their signatures alone make the award. If they do not, the umpire’s signature joins one appraiser’s, item by item or on the whole award. That structure gives each appraiser a reason to be reasonable: an inflated or lowball position tends to lose credibility with the umpire. Many panels use an itemized award form so that everyone can see how each line was decided.
What appraisal does not decide
Appraisal answers one question: how much is the covered damage worth? It does not decide:
- Coverage. Whether an exclusion applies, whether the damage came from a covered peril, or whether the policy was in force are coverage issues. The insurer can still raise them after an award.
- Bad faith or unfair claim handling. North Dakota recognizes a common-law bad-faith claim against insurers, and its insurance code addresses unfair claim settlement practices. Those are legal matters for a North Dakota attorney, not an appraisal panel.
- Policy interpretation. What a contested phrase in the policy means is a question for the parties, their lawyers, or a court.
If a coverage dispute sits underneath the valuation dispute, talk to an attorney before or alongside appraisal. Consumers can also contact the North Dakota Insurance Department, led by the elected Insurance Commissioner, which accepts complaints about insurers.
Common pitfalls
- Letting deadlines run. Suit-limitation periods are set by your policy and state law, and appraisal may not pause them. Check your policy and ask an attorney before assuming you have time.
- Choosing a partial appraiser. An appraiser paid on a contingency of the award may be challenged as not disinterested. Ask how your appraiser is compensated.
- Skipping mitigation. Damage that grows because a roof was not tarped or a basement not dried may be disputed as a separate, uncovered loss.
- Vague demands. A demand that does not name the disputed amounts invites delay.
- Repairing before documenting. Once materials are torn out, the appraisers have only what you photographed and kept.
The North Dakota context
Appraisal here runs on a prairie calendar. The severe-weather season runs roughly May through August, and hail and wind claims pile up in a short window. The construction season is short too, so roofing and siding crews book out quickly and prices can move between the first estimate and the award.
Winter changes the inspection itself. From November into March, roofs are often snow-covered or iced, and walking a steep slope is unsafe. Panels sometimes rely on summer photos, drone images, or a partial inspection and agree to finish the roof once it clears. Interior losses from ice dams and frozen pipes, on the other hand, are easiest to document in winter while the damage is fresh.
Distance matters as well. North Dakota has 53 counties, and a loss in a small town may sit hours from the nearest umpire candidate or specialty contractor. Local labor rates, travel, and supplier availability all belong in an honest estimate.
- Calendar every deadline in your policy the day the disagreement starts.
- Keep photographing as conditions change through the seasons.
- Do not let a snow-covered roof stall the claim; agree in writing on how and when it will be inspected.
North Dakota Insurance Appraiser represents policyholders in appraisal and serves as umpire when asked, statewide. We are not a law firm or a public adjuster, and no appraiser can promise a particular result. If you want to talk through whether appraisal fits your claim, start at our request page.