The Appraisal Process

Meeting for Appraisal Process
Standard Property Policy triggers Appraisal
Statutory Condition 11 of a Standard Property Policy triggers Appraisal. The process is outlined in s.128 of the Insurance Act of Ontario and similar Acts in other Common-law Provinces.
  • The appraisal process is not an arbitration but rather a valuation process.
  • The appraisers and the umpire are not to determine legal questions. They are valuators who use their expertise to determine the value of the loss.
  • A Proof Of Loss (POL) must first be submitted before either party can demand appraisal. The POL should comply with Statutory Condition 6 as set out in s.148 of the Ontario Insurance Act.
  • Once demanded and an appraiser is identified to act for the party demanding appraisal, the responding party “shall” appoint an appraiser to represent them within seven clear days next. Once both appraisers have been appointed they shall select an umpire within fifteen days. Once the appraisers and umpire have been appointed, an administrative tribunal is deemed to have been created for the limited purposes of establishing the value of loss.
  • If the responding party fails to appoint an appraiser within the stated timeline or if the two appraisers fail to select an umpire, willing and able to act, a Motion may be brought before the court to have either or both appointed.
  • Subject to s. 143, once Appraisal has been demanded the amount of loss is determined in accordance with s. 128.
  • The appraisers’ duties are set out in s 128(3) of the Act. They are to “determine matters in disagreement”. Each appraiser will set the value of the loss and attempt to convince the other that their value is appropriate in the circumstances. It is only when they are unable to reconcile their differences that they meet with the umpire.
  • Often, scope of loss as it relates to the insured peril is a matter of disagreement.
  • The appraisal process is not intended as a vehicle to reinvestigate a loss. Matters in disagreement are required to be resolved expeditiously. ‘Krofchick et al. and Provincial Insurance Co. Ltd. et al.’
  • Although it is necessesary the appraisers select an umpire within fifteen days, the umpire does not become actively involved further until the appraisers meet or otherwise communicate to discuss and clearly identify matters in disagreement.
  • An umpire must be (and perceived by the public to be), impartial and independent. ‘Campbell v.Desjardins, 2020
  • If I am selected to act as an umpire, I will arrange a conference call. This will be followed by the drafting of an agreement to be signed by both parties and appraisers that shall provide a directive to the appraisal tribunal to determine the amount of loss and in so doing, consider the extent of repairs or replacement required or, if made, their adequacy, commonly referred to as “scope of loss” as it pertains to the peril covered by the policy for which a claim has been made.
  • Each party to pay a non-refundable deposit to accompany the Appraisal Agreement.
  • I will arrange for a meeting room and special equipment if required.

When appraisers can’t settle!

  • Briefs are to be prepared to address in particular matters in disagreement, the principle of “best evidence” to be given the most weight. Policy declarations and wordings, engineering reports, drawings, photographs and other professional or vendor reports are encouraged.
  • Spreadsheets should be considered, clearly identifying matters in disagreement for resolution.
  • Witnesses should be identified, their background and experience or CV’s provided. Also, the topic they are being requested to speak to outlined.
  • When appraisal is to determine the amount of loss for more than one line of coverage, appraisers are requested to outline their order of preference. A conference call may be necessary. *
  • Briefs should be exchanged between appraisers with a copy submitted to the me at least ten (10) business days before the appraisal meeting. If an exchange is not convenient, two copies of appraiser’s briefs may be delivered to me.
  • Upon receipt of both sets of briefs, I will arrange to courier the opposing appraiser’s brief to one another. Electronic briefs accepted.
  • A site or off-site inspection meeting, limited to members of the tribunal, is encouraged when there is physical evidence available to address specific unresolved matters in disagreement. This may include on-site, warehouses, storage lockers, etc.
  • If additional or new evidence is brought forward by either appraiser after exchange of briefs or at the appraisal meeting itself, I will entertain a request for an adjournment to allow each party time to examine the additional or new evidence.

Appraisal Hearing/Meeting

  • On the day of the appraisal hearing/meeting I will address those present re authority of appraisal and process to be followed;
  • Appraiser for the insured to present an opening statement;
  • Appraiser for the insurer to present an opening statement;
  • First item for discussion, followed by second, third, etc., e.g. Building; Contents; ……. * Order for discussion to be agreed to before the appraisal meeting based on availability of witnesses.
  • Witnesses for both parties should be prepared to address issues in dispute in support of best evidence rule and take questions from both appraisers and the umpire.
  • Witnesses may be sequestered if either appraiser so requests. If witnesses for both parties remain and upon listening to witnesses for opposing party have any questions, those questions should flow through the respective appraiser unless agreed by the tribunal that witnesses have an open discussion re each other’s opinion.
  • Witnesses for opposing parties may be asked by the tribunal to meet separately and between themselves discuss any particular category or line items to see if they can agree between themselves as to RC value and make joint recommendations back to the tribunal. A breakout room will be provided.
  • An example would be when discussing a building loss and witnesses for both parties are building damage estimators or restoration contractors. One believes in a higher number of labour hours for particular repair line items. When discussing between themselves, they may come to an agreement and make a joint recommendation to the tribunal where it may be accepted or further explored.
  • Incurred costs, paid or owing, will be given greater weight than estimated costs.
  • The insurance industry standard is the use of Xactimate, Simsol, Bluebook or other estimating software for building damage losses. Depending on how a particular line item is categorized, the trade summary categories may be skewed.
  • It is recognized estimitating includes both skillful talent (art) and science.
  • Observers will be allowed, recordings and note taking prohibited.
  • There will be encouragement on my part to bring appraisers together and agree on amounts of loss on a category basis. Where agreement between appraisers cannot be reached, I may side with one or the other or in some cases after reviewing evidence, questioning of witnesses and discussing the matters or items in dispute, present a figure myself for acceptance, two of three in agreement becoming binding.
  • Once the RC of line items and category is agreed to by two of three tribunal members, it will not be revisited. New evidence will not be allowed to be introduced once a decision has been made.
  • ACV may be determined on a line item, category or global basis. Again, when two of three agree.
  • Indemnity payments made to or on behalf of the insured must be identified and agreed upon as being indemnity payments versus claims expense. An award may include or exclude advance and interim indemnity payments previously made by the insurer, to or on behalf of the insured.
  • Indemnity payments previously made as advances or interim will be considered ACV payments only.


  • A written award will be drafted, reviewed and edited by the tribunal as necessary.
  • A unanimous award is always sought, and members will be invited to sign the award, the appraisal considered completed when agreed to and signed by two of three tribunal members.
  • Following a written Award, briefs for both parties will be returned to respective appraisers.
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