How do I invoke an insurance appraisal clause to challenge a low diminished value offer?

Detailed Answer

North Carolina motorists often learn—after their car has been repaired—that the vehicle is worth less simply because it has a collision history. This loss in resale value is called diminished value. When the insurance company’s offer does not reflect the real loss, you can invoke the appraisal clause found in most North Carolina auto policies to obtain an independent valuation.

1. Confirm the Appraisal Clause Exists

Look under the “Physical Damage Coverage” or “Damage to Your Auto” section of your policy. A standard clause reads:

“If we and you disagree on the amount of loss, either may demand an appraisal. Each party will select a competent appraiser within 20 days. The two appraisers will select an umpire. A decision agreed to by any two will be binding.”

North Carolina law allows insurers to include this private dispute-resolution method, provided it does not violate public policy or the Unfair Claims Settlement Practices Act, N.C. Gen. Stat. § 58-63-15(11).

2. Send a Written Demand—Before Deadlines Expire

• Draft a short letter stating you “formally demand appraisal under the policy” and identify the disputed amount (diminished value).
• Name your chosen appraiser and include contact information.
• Send the letter by certified mail so you have proof of delivery.

Most clauses require that each side name an appraiser within 20 days of the demand. If the insurer misses that window, remind it in writing; continued non-compliance may support an Unfair Claims complaint with the N.C. Department of Insurance.

3. Hire a Qualified Appraiser

North Carolina does not license automobile appraisers, but the person you choose should:

• Be familiar with post-repair diminished value methodology recognized by North Carolina courts (e.g., 17c+ adjustments).
• Provide a written report with market data, recent comparable sales, and pictures.
• Be prepared to defend the number at an in-person inspection with the umpire.

4. Selecting the Umpire

Your appraiser and the insurer’s appraiser must agree on an umpire within 15 days. If they cannot, either party may petition the Clerk of Superior Court to appoint one, using the court’s inherent authority or the Revised Uniform Arbitration Act, N.C. Gen. Stat. § 1-569.11.

5. The Appraisal Meeting

Both appraisers inspect the vehicle (or repair records if the car was already sold). They share their calculations with the umpire. When any two out of the three sign the award, the amount becomes binding on the parties—although it may still be challenged in court for bias, fraud, or procedural defects.

6. Payment of the Award

The insurer pays the undisputed portion of the claim immediately and must pay the appraisal award within the policy’s time limits, usually 30 days. Failure can trigger interest and bad-faith penalties under § 58-63-15(11).

Helpful Hints

• Request the insurer’s diminished value worksheet to see how it calculated its offer.
• Photograph the vehicle before repairs begin and keep all repair invoices; your appraiser will need them.
• Use certified mail or email with read receipts for every communication.
• Ask your appraiser for a flat fee rather than a percentage of the recovery to avoid conflicts.
• If the adverse driver’s carrier refuses to honor the award, you may still sue the at-fault driver in small-claims or district court for the difference.

Need Help? A seasoned North Carolina personal-injury attorney can guide you through the appraisal process, negotiate with the insurer, or pursue litigation if necessary. Call our office today at 919-313-2737 for a free consultation and protect the true value of your vehicle.

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