Is Appraisal Becoming Too Much Like Litigation?

by Justin Petty

Let’s dive right in…

Question:

We have had several recent repair disputes go to appraisal, and the process seems to be getting more complicated every time. Instead of the appraisers simply reviewing the estimates, repair procedures and damages, we are seeing lengthy position letters, arguments over what can and cannot be considered, delays in exchanging information, procedural objections and sometimes what feels more like preparing for court than trying to determine the amount of the loss. Is that really how the appraisal process is supposed to work?

Answer: No.

And you have identified a problem that I think is becoming increasingly common. I have participated in hundreds of automobile appraisals as an appraiser and/or umpire, and somewhere along the way, some people seem to have forgotten what the appraisal process is supposed to accomplish.

Appraisal is supposed to be a relatively simple contractual process for resolving a disagreement over the amount of loss. In its simplest form, the policyholder selects an appraiser, the insurance company selects an appraiser and those two appraisers independently investigate and evaluate the disputed loss. They exchange information, discuss their differences and attempt to reach an agreement.

If they cannot agree, the remaining differences are submitted to an umpire. Pretty straightforward, right? It should be.

Unfortunately, some appraisal files are starting to look more like litigation lite.

Instead of starting with the damaged vehicle, estimates, photographs, measurements, invoices, scan reports, OEM repair procedures and the actual disputed operations, the file starts with position papers, objections, procedural arguments and declarations about what the other appraiser supposedly can or cannot consider.

An Appraiser Is Not Supposed to Be an Advocate

This may be the most important point.

An appraiser is selected by one party and normally paid by that party, but that does not mean the appraiser’s job is to blindly defend that party’s original position.

There is a big difference between supporting your appraisal opinion and advocating for your customer. The appraiser’s job is to independently determine the amount of the loss.

That means the goal should not be to produce the highest number possible because the vehicle owner hired you, or the lowest number possible because an insurance company hired you.

The goal is to arrive at a competent, reasonable and supportable number. If the evidence supports my original opinion, then I should be able to explain why.

If better evidence shows that I was wrong about something, I should change my opinion. That isn’t losing, that’s appraising.

In fact, I become suspicious when an appraiser can review substantial new information and somehow never change a single position on anything. If nothing can possibly change your opinion, then I have to wonder whether you are actually appraising the loss or simply defending the number you started with.

In a Repair Dispute, Start With the $10,000 Question

Let’s say the insurance company’s repair estimate is $18,000 and the repair facility’s estimate is $28,000.

The first question should not be:

“How do I defend the $28,000 estimate?”

And it shouldn’t be:

“How do I defend the $18,000 estimate?”

The proper question is:

“Why are these estimates $10,000 apart?”

The disagreement could involve labor rates, frame or structural measurements, sectioning procedures, pre- and post-repair scans, calibrations, corrosion protection, blend operations, refinishing procedures, seam sealer, destructive testing, parts selection or some other legitimate repair issue.

Those are appraisal issues and those are the things the two appraisers should be talking about. Get the estimates side by side. Identify the differences. Get the supporting documentation. Inspect the vehicle when necessary. Review the manufacturer’s procedures. Ask questions, then make a decision. That is appraisal.

Evidence Should Change Opinions

There is absolutely nothing wrong with one appraiser changing his or her opinion after receiving better information. That is exactly what I expect a competent appraiser to do. If another appraiser sends me an OEM procedure that I overlooked, I’m going to read it and if it changes my opinion, then my opinion changes. If I provide documentation showing that a calibration, measurement or repair operation is necessary, I expect the other appraiser to evaluate that evidence honestly as well.

An appraisal should be an exchange of competent information between professionals attempting to determine the proper amount of loss. It should not be a staring contest to see which appraiser can refuse to move from his original number the longest. There is no trophy for being stubborn.

Position Letters Aren’t Necessarily the Problem

Now, I don’t want anybody to misunderstand me. There is nothing inherently wrong with a written position.

Sometimes complicated disputes absolutely require written explanations. If there are 25 disputed repair operations, I would much rather receive an organized document explaining each issue and the evidence supporting it than get an email that simply says:

“Will you agree to $23,500?”

Documentation, organization and explaining your reasoning is good. The problem starts when the paperwork becomes a substitute for appraisal. A five-page argument doesn’t prove that a particular operation is necessary. An objection doesn’t establish a labor rate. A strongly worded email doesn’t tell me whether a component can safely be repaired. The evidence still must carry the opinion. That’s the part we cannot lose sight of.

Not Every Disagreement Belongs to the Appraisers

Another reason these files sometimes start resembling litigation is because the participants fail to clearly identify the dispute before appraisal begins.

Appraisal generally determines the amount of loss. It does not automatically determine every coverage or legal dispute between the insurance company and policyholder.

For example, an appraiser may be able to determine the reasonable cost of a particular repair operation while the insurance company separately maintains a coverage position concerning whether that item is payable under the policy.

A properly framed repair appraisal should generally be asking something along these lines:

Assuming this item or damage is covered, what is the reasonable amount of loss associated with properly repairing it?

If nobody can clearly explain what is actually being disputed, the appraisal is probably going to take longer than it should.

And Then There Is the Umpire…

The same problem shows up when an umpire becomes involved. An umpire is not a judge.

The umpire is not there to determine which appraiser wrote the most persuasive brief or used the strongest adjectives.

The umpire is also not supposed to become a mediator, claims adjuster or investigator charged with reconstructing the entire file because the two appraisers failed to do their jobs.

The umpire is a third appraiser.

Before an umpire is asked to decide anything, the two party-selected appraisers should have investigated the loss, exchanged their positions, identified what they agree on and narrowed down what remains disputed. They then give the umpire the remaining disputed items and the evidence supporting each position.

I have acted as umpire on files where I received little more than two dollar amounts and was apparently expected to figure out what everybody was arguing about.

How am I supposed to independently evaluate a dispute when nobody has even clearly identified the dispute?

That isn’t an umpire problem, that’s an appraisal-process problem.

Another misconception is that once the umpire gets involved, the answer should land somewhere between the two appraisers’ numbers.

Maybe it does, maybe it doesn’t.

If one appraiser says $20,000 and the other says $30,000, that does not magically make $25,000 correct. The umpire should independently evaluate the disputed items.

If the evidence supports $21,000, then the proper answer may be $21,000. If it supports $29,500, then it may be $29,500.

And yes, sometimes the proper answer might be $25,000.

But the answer should come from the evidence-not arithmetic designed to make everybody equally unhappy.

Shops Can Make This Process Much Easier

Repair facilities can help tremendously. Make the dispute easy to understand. Provide the complete estimate and the carrier’s estimate. Identify the disputed operations. Provide photographs, scan results, measurements, invoices and parts documentation.

Provide the applicable manufacturer repair procedures, calibration requirements and technical documentation. The better the underlying repair documentation is, the less reason anybody has to turn the appraisal into an argument about positions.

Remember, appraisal is an evidence-based process. An appraiser cannot properly consider evidence that nobody provides.

Professional Disagreement Is Not the Problem

Reasonable professionals are going to disagree sometimes. That’s the entire reason appraisal exists. If everybody always agreed on the amount of a loss, there would be no need for an appraisal clause. The problem isn’t disagreement.

The problem is when disagreement turns into advocacy, withholding information, procedural games, positional bargaining or refusing to consider anything that threatens the number somebody started with.

I don’t need the opposing appraiser to agree with me.

I need the opposing appraiser to show me why they disagree with me. Then we can talk about something productive. Show me the repair procedure, the estimate, the photograph, the measurement, the market evidence.

Show me the support.

If your evidence is better than mine, I’ll change my opinion. If mine is better than yours, you should change yours.

If we still reasonably disagree after doing all of that, then we have an umpire.

Keep the Main Question the Main Question

Appraisal should not require the participants to pretend they are preparing for trial. It shouldn’t reward the appraiser who writes the longest argument and it certainly shouldn’t become a contest to determine who is the most difficult person to deal with.

For a repair dispute, once the coverage issues are separated out, the central appraisal question is really pretty simple:

What does it reasonably cost to properly repair this vehicle?

Everything else should help us answer that question.

If it doesn’t, maybe we need to ask ourselves why we are spending time on it. Appraisal is supposed to resolve disputes – not create a new one.

When competent, independent appraisers exchange the relevant evidence, investigate the loss, remain willing to change their opinions when better information is presented, and use the umpire only when a genuine disagreement remains, the process usually works.

When everybody starts acting like lawyers instead of appraisers, we shouldn’t be surprised when the appraisal begins to look like litigation and that defeats the whole point.

Important note: Appraisal provisions vary by insurance policy and jurisdiction. The specific policy language should always be reviewed to determine the scope and requirements of the appraisal process. Nothing in this article is intended as legal advice.

Want more? Check out the September 2026 issue of Texas Automotive!