What Is an Appraisal Umpire?

An appraisal umpire is a neutral, disinterested third party who becomes involved in the insurance appraisal process when the two appraisers cannot reach agreement on all disputed issues. The umpire's role is to review the evidence and the appraisers' positions on the unresolved matters and reach an independent professional conclusion.

The umpire does not represent either party. The umpire is typically selected by agreement of the two appraisers in accordance with the applicable appraisal provision. If the appraisers cannot agree on an umpire, the policy or applicable law may provide another method for selection. The umpire's function is to serve as a neutral participant in the process, not as an advocate.

In many appraisal proceedings, the two appraisers are able to reach agreement on the disputed amount through discussion and exchange of evidence. When that happens, the umpire is not needed.

However, when the appraisers cannot agree on one or more issues, the applicable appraisal provision may call for those unresolved differences to be submitted to an umpire. The umpire then reviews the evidence and the appraisers' positions on the specific issues they could not resolve and reaches an independent conclusion.

The umpire's involvement is typically limited to the issues the appraisers could not resolve — not the entire dispute. If the appraisers agreed on some issues but not others, the umpire addresses only the unresolved items.

The umpire is typically selected by agreement of the two appraisers in accordance with the applicable appraisal provision. The appraisers may propose candidates and agree on one who meets the applicable qualifications.

If the appraisers cannot agree on an umpire, the policy or applicable law may provide another method for selection — such as allowing either party to petition a court to appoint one.

Umpire qualifications, selection procedures, and deadlines vary by policy and jurisdiction. The applicable provision should be reviewed carefully.

The umpire's neutrality is fundamental to the integrity of the appraisal process. An umpire who has a financial interest in the outcome, a relationship with one of the parties, or a bias toward a particular result undermines the purpose of the process.

Many appraisal provisions require that the umpire be disinterested — meaning the umpire has no financial stake in the outcome and no relationship with either party that would compromise their independence. The specific requirements depend on the policy and applicable law.

Under many appraisal provisions, an agreement between one appraiser and the umpire on the unresolved issues constitutes a binding appraisal award. The umpire reviews the evidence and the appraisers' positions and reaches an independent conclusion — which, if it aligns with either appraiser's position on the submitted issues, creates the required agreement.

The umpire does not simply split the difference between the appraisers' positions. The umpire's conclusion should be based on the available evidence and relevant methodology — not on a mechanical average of the two appraisers' numbers.

The exact requirements for a valid award — and its legal effect — depend on the policy language and applicable law. An appraisal award addressing the amount of loss does not automatically resolve every other issue associated with a claim.