Short Answer

In North Carolina, if your auto policy’s appraisal clause has been invoked and the two appraisers disagree, you are generally expected to complete the appraisal process, including the umpire step, before a court will decide the amount of loss. You can still file in small claims to preserve deadlines, but the court may pause the case until appraisal finishes. If the dispute is about coverage or liability rather than value, the appraisal/umpire step may not be required.

Understanding the Problem

You want to know whether, under North Carolina law, you must use an umpire under your policy’s appraisal clause before filing a small claims case. You are the policyholder seeking payment for diminished value, and the insurer’s appraiser has given a lower figure than your appraiser. The decision point is whether you must finish the policy’s appraisal process (including the umpire) before suing in Magistrate’s Small Claims Court.

Apply the Law

Under North Carolina law, an appraisal clause is a contractual process for resolving the amount of loss. When either side invokes appraisal and the two appraisers disagree, the policy typically requires selection of an umpire to decide the value. Courts generally enforce these provisions in value-only disputes by staying or dismissing lawsuits until appraisal is completed. Small claims is a forum within the General Court of Justice for money disputes up to a statutory cap, and you must also comply with any policy deadline in the “Legal Action Against Us” clause.

Key Requirements

• Amount-of-loss dispute: The appraisal clause applies when the fight is over value, not whether the loss is covered.
• Compliance with policy steps: If appraisal was invoked, finish the process, including the umpire step when appraisers disagree.
• Conditions precedent: Satisfy other policy conditions (notice, cooperation, proof of loss) before suit.
• Small claims fit: Your claim must be within the small claims monetary cap and filed in the proper county.
• Deadlines: File before any policy “legal action” deadline and within the general statute of limitations for contract claims; policies sometimes set shorter limits.

What the Statutes Say

• North Carolina General Statutes, Chapter 7A (Courts; Small Claims) - Establishes magistrates’ small claims court and its jurisdictional limits.
• North Carolina General Statutes, Chapter 1 (Civil Procedure and Limitations) - Sets time limits for civil actions; contract claims have defined periods in statute and policy.
• North Carolina General Statutes, Chapter 58 (Insurance) - Regulates insurance policies; policy terms often govern appraisal and suit limits.

Analysis

Apply the Rule to the Facts: Your dispute is diminished value, which is a valuation issue. Because the insurer invoked or participated in appraisal and the two appraisers disagree, the policy’s umpire step is triggered. A small claims magistrate will likely require completion of appraisal (including the umpire’s decision) before deciding the amount of loss, or will stay the case. You may still file to protect deadlines, but expect the court to pause the case until appraisal concludes.

Process & Timing

1. Who files: The policyholder. Where: Clerk of Superior Court, Small Claims (Magistrate’s Court) in the proper North Carolina county. What: File a Magistrate Summons and a Complaint for Money Owed. When: Before your policy’s “Legal Action Against Us” deadline and within applicable limitation periods; if appraisal is ongoing, file and ask for a stay.
2. If appraisal appraisers disagree, follow the policy to select an umpire. If they cannot agree on an umpire, the policy typically allows asking a North Carolina trial court to appoint one. The appraisal/umpire decision can take weeks, and timing varies.
3. After the umpire issues a value, if the claim is still unpaid, proceed with the small claims hearing. The expected outcome is a magistrate’s judgment on the money owed, subject to appeal.

Exceptions & Pitfalls

• If the dispute is coverage or liability (not value), the appraisal/umpire step may not apply; a court can decide coverage.
• Filing before finishing appraisal may lead to a stay or dismissal without prejudice; bring proof you completed required policy steps.
• Do not miss suit deadlines; appraisal usually does not automatically extend them.
• Confirm you sued the correct legal entity and in the right county or service may fail.
• Watch costs: some policies shift more of the umpire fee to the insured; budget for that before proceeding.
• If your claim exceeds the small claims cap, file in District Court instead.

Talk to a Personal Injury Attorney

If you’re dealing with a diminished value appraisal standoff and wondering whether to use an umpire or file in small claims, our firm can help you understand your options and timelines. 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.