Calling Strikes: The Appraisal Process in Michigan
If you’ve filed a property damage claim under your homeowners or commercial insurance policy in Michigan, you might encounter something called an appraisal clause. It’s a standard provision in many policies—but unless you’ve been through the process before, it can feel confusing and even intimidating.
As Michigan attorneys who frequently handle insurance disputes, we want to help you understand what an appraisal is, how it works, and what to watch out for if your insurance company won’t pay what your claim is worth.
What Is an Appraisal Clause?
An appraisal clause is a method for resolving disputes over the amount of loss, not whether a claim is covered. If you and your insurance company agree that damage occurred but disagree on the dollar value, either party can demand appraisal.
In Michigan, the appraisal process is governed by the language of the insurance policy itself—there is no standalone statute that governs appraisals. However, Michigan courts recognize and enforce appraisal provisions as a form of contractual alternative dispute resolution.
Here's how it typically works:
One party demands appraisal under the policy’s terms.
Each party selects a competent appraiser.
The two appraisers select an impartial umpire.
The appraisers assess the loss. If they agree, their valuation is binding. If they disagree, the umpire acts as the tiebreaker.
The final value is binding when at least two of the three (appraisers and umpire) agree.
This process is supported by Michigan case law. For example, in Auto-Owners Ins Co v Kwaiser, 190 Mich App 482 (1991), the Court of Appeals reaffirmed that appraisal is binding on the parties with respect to the amount of loss, so long as the process follows the contract.
Why This Matters in Michigan
Michigan law doesn’t require insurers to offer appraisal—but if your policy includes it, you can invoke the process to challenge a low valuation. It’s often faster and less expensive than filing a lawsuit, and it’s recognized by the courts as a valid means of resolving valuation disputes.
That said, appraisal doesn’t resolve coverage disputes. If your insurer says the policy doesn’t cover your loss at all, you may need to pursue a legal claim for breach of contract or bad faith. Michigan recognizes first-party bad faith claims only under certain circumstances, but you may still have remedies under MCL 500.2006, Michigan’s "Uniform Trade Practices Act" penalty interest statute.
Common Pitfalls in Michigan Claims
Delays or denial of appraisal rights: Some insurers will drag their feet or refuse to engage in good faith, despite policy language allowing appraisal.
Disputes over scope of damage: In Rosencrans v State Farm Fire & Casualty Co, unpublished per curiam opinion of the Court of Appeals, issued July 14, 2015 (Docket No. 320452), the court acknowledged that appraisal is limited to quantifying damage, not interpreting coverage.
Lowball estimates: Insurers may offer less than the cost of repair or replacement and hope you don’t challenge it.
When to Consult a Michigan Insurance Lawyer
If you’ve received a settlement offer that doesn’t reflect your actual losses—or your insurer refuses to participate in a fair appraisal—legal counsel can help. We regularly assist Michigan homeowners and business owners by:
Reviewing your policy to confirm your right to appraisal
Guiding you through the selection of a qualified appraiser
Ensuring the appraisal process is conducted fairly
Filing suit when insurers act in bad faith or violate policy terms
Final Thoughts
The appraisal process in Michigan can be a powerful tool to level the playing field, but only if you know your rights and enforce them. Don’t accept a lowball settlement without exploring your options.
If you're dealing with a property damage claim in Michigan and aren't sure how to proceed, contact our office. We can help you navigate the appraisal process or take legal action if needed to protect your rights.
Legal References:
Auto-Owners Ins Co v Kwaiser, 190 Mich App 482 (1991)
Rosencrans v State Farm Fire & Casualty Co, unpublished per curiam opinion of the Court of Appeals, issued July 14, 2015 (Docket No. 320452)
MCL 500.2006 (penalty interest statute for delayed payments)
