Short Answer

Usually, no. Under typical North Carolina auto policy language, each side pays its own appraiser and both sides split the umpire’s fee if one is needed. The insurer cannot add an extra “processing” or “administrative” charge just because you invoked the appraisal clause. Appraisal is a cost-sharing process defined by the policy; coverage and liability issues are handled separately.

Understanding the Problem

You’re asking whether, in North Carolina, an insurer can tack on extra fees when you invoke the policy’s appraisal clause to resolve a dispute about the amount of your diminished value. Here, you already obtained an appraisal, and your attorney plans to invoke the appraisal clause after the insurer’s first offer came in far lower than the appraisal-based demand.

Apply the Law

In North Carolina, the appraisal clause in an auto policy is a contractual, private process used to resolve a disagreement over the amount of loss (for example, the dollar value of diminished value). The policy language controls how you start appraisal, who participates, and how costs are shared. Appraisal decides value only; it does not decide whether a loss is covered or who is legally at fault. There is no single statute that sets a universal appraisal fee schedule for auto claims; instead, insurers must follow their approved policy forms and North Carolina’s claims-handling rules.

Key Requirements

• Dispute on amount only: There must be a genuine impasse over the dollar value of the loss; appraisal does not decide coverage or fault.
• Written demand under the policy: Appraisal starts when a party makes a written demand that follows the policy’s clause (often after a clear impasse).
• Independent appraisers: Each side chooses a competent, disinterested appraiser to value the loss.
• Umpire if needed: If the appraisers cannot agree, they submit differences to a neutral umpire; an award signed by any two (appraiser and umpire) sets the amount.
• Cost-sharing: Each side pays its own appraiser; the parties split the umpire’s fee and any joint appraisal expenses. No extra insurer “invocation” fee.
• Forum and timing: This is a private, contract process. If an umpire must be appointed and the parties cannot agree, a court with jurisdiction can be asked to appoint one. Policies may require appraisal demands be made within a reasonable time after impasse.

What the Statutes Say

• N.C. Gen. Stat. § 58-63-15(11) (Unfair claim settlement practices) - Insurers may not misrepresent policy provisions or impose unfair claim practices; they must adhere to the policy as written.
• N.C. Gen. Stat. § 75-1.1 (Unfair or deceptive acts or practices) - Prohibits unfair or deceptive practices in trade; charging unauthorized fees contrary to policy terms can raise issues under this law.

Analysis

Apply the Rule to the Facts: Your dispute is about the amount of diminished value, so appraisal is the right tool if your policy contains that clause. Because the policy controls cost allocation, you pay your chosen appraiser and the insurer pays theirs; you split the umpire only if one is needed. You already paid for an initial appraisal; that professional can often serve as your designated appraiser, so no extra fee is required just to trigger appraisal. The insurer cannot add an administrative surcharge for invoking the clause.

Process & Timing

1. Who files: The policyholder (or their attorney). Where: Send a written appraisal demand to the insurer’s claims representative per the policy’s notice/address requirements. What: A letter that invokes the “Appraisal” clause, identifies the dispute (amount of diminished value), and names your appraiser. When: After a clear impasse; act promptly and follow any timing stated in your policy.
2. The insurer names its appraiser. The two appraisers exchange information and try to agree on the amount. If they agree, they issue a written award.
3. If they cannot agree, they select an umpire. If they cannot agree on an umpire, a court can be asked to appoint one. Any two (either both appraisers or one appraiser and the umpire) sign the award, which sets the amount of loss. The insurer then adjusts payment per policy limits and deductibles.

Exceptions & Pitfalls

• Coverage vs. amount: Appraisal cannot decide whether diminished value is covered; it only decides the dollar amount. Coverage disputes follow a different track.
• Third-party claims: If you’re claiming against the at-fault driver’s insurer (not your own policy), that insurer’s appraisal clause typically does not bind you, and they cannot charge you to use it.
• Hidden fees: Insurers cannot impose extra “invocation” or “processing” fees beyond the policy’s cost-sharing terms. Push back if such a fee appears.
• Choosing an appraiser: Select a competent, disinterested appraiser. A conflicted appraiser can derail the process.
• Umpire costs: You split the umpire only if needed; confirm in writing how any shared costs will be handled.

Talk to a Personal Injury Attorney

If you’re facing a low diminished value offer and want to use the appraisal clause, our firm can help you evaluate coverage, start the appraisal process, and protect your rights. Reach out today at (919) 341-7055.

Disclaimer: This article provides general information about North Carolina law based on the single question stated above. It is not legal advice for your specific situation and does not create an attorney-client relationship. Laws, procedures, and local practice can change and may vary by county. If you have a deadline, act promptly and speak with a licensed North Carolina attorney.