Flood Insurance Policy Appraisal Process
The Standard Flood Insurance Policy (SFIP) appraisal process is a mechanism for resolving only disputes regarding the dollar amounts to be paid for flood damages covered by the SFIP. Appraisal is a means to avoid a lawsuit, and FEMA encourages the use of appraisal as a viable alternative to litigation. FEMA believes that the appraisal clause is one of the last resorts available for attempting to resolve a claim (initiating a lawsuit being the last resort).
The text of the appraisal provision states the following:
P. Appraisal
If you and we fail to agree on the actual cash value or, if applicable, replacement cost of your damaged property to settle upon the amount of loss, then either may demand an appraisal of loss. In this event, you and we will each choose a competent and impartial appraiser within 20 days after receiving a written request from the other. The two appraisers will choose an umpire. If they cannot agree upon an umpire within 15 days, you or we may request that the choice be made by a judge of a court of record in the State where the covered property is located. The appraisers will separately state the actual cash value, the replacement cost, and the amount of loss to each item. 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 actual cash value and loss.
Each party will:
- Pay its own appraiser; and
- Bear the other expenses of the appraisal and umpire equally.
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Standard Flood Insurance Policy Forms
- Dwelling Policy Form
- General Property Policy Form
- Residential Condominium Building Association Policy (RCBAP) Form
The National Flood Insurance Program (NFIP) offers three Standard Flood Insurance Policy forms. These forms provide policyholders with a description of their coverage and other important coverage information.
