Appraisal
An Appraisal is a formal process where independent experts determine the value of your damaged property or the extent of your loss when you and your insurer disagree on the claim amount.
What You Need to Know
If your insurance company offers $20,000 for your fire-damaged kitchen but you believe it's worth $50,000, either party can demand an appraisal. Each side hires an appraiser, those two appraisers pick a neutral third appraiser (umpire), and the final decision is binding.
The appraisal process:
- Either party invokes the appraisal clause in the policy
- Each side selects an independent appraiser
- The two appraisers choose a neutral umpire
- Both sides submit evidence, photos, and estimates
- The umpire breaks any tie and issues a binding award
Appraisal is typically faster (2-4 months) and cheaper ($3,000-$10,000 in appraiser fees) than litigation ($25,000-$100,000+, 1-2 years). It only settles the amount of a covered loss — not whether coverage exists in the first place.
Why It Matters for Restaurant Owners
Appraisal helps resolve valuation disputes without expensive litigation. It's particularly useful for specialty restaurant equipment where replacement costs aren't straightforward — custom hoods, specialized ovens, imported equipment, or unique buildouts.
Why restaurants face valuation challenges:
- Custom installations aren't standard catalog items with published prices
- Insurers calculate heavy depreciation on older equipment
- Labor, installation, and code-upgrade costs are often disputed
Keep detailed records, photos, and receipts of all your equipment and improvements — strong documentation typically leads to higher settlements. Consider demanding appraisal when the gap between your valuation and the insurer's offer exceeds roughly $25,000-$50,000, and choose an appraiser with restaurant and commercial kitchen experience.
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