When appraisal is the right tool
Appraisal is built into most Florida HO-3 policies. It addresses amount of loss disputes where:
- Coverage is agreed (the carrier acknowledges the loss is covered)
- The dispute is scope, pricing, or depreciation
- Both parties have documentation
- You want a binding resolution faster than litigation
Appraisal typically resolves in 60–120 days. A three-person panel (your appraiser, carrier's appraiser, and a jointly-selected umpire) sets the amount. Any two of three signatures binds the parties.
When litigation is the right tool
Litigation addresses everything appraisal can't:
- Coverage disputes (was this covered?)
- Bad-faith damages under Fla. Stat. 624.155
- Class actions or pattern cases
- Recovery of attorney fees (when statutorily available)
- Complex commercial matters
Litigation typically takes 12–36 months to resolve. Discovery, depositions, motion practice, and trial schedule all factor in.
Cost comparison
Appraisal:
- Each party pays their own appraiser (typically $200–$500/hr; panel hours vary)
- Umpire fee split 50/50
- Total policyholder cost typically $3,000–$15,000
Litigation:
- Contingency counsel typical for first-party insurance cases
- No up-front policyholder cost in most cases
- 30–40% of recovery to counsel
Appraisal costs are known upfront. Litigation costs are deferred but proportional.
Outcome certainty
Appraisal outcomes are typically within 15–30% of one party's position. Umpires rarely pick extremes. Middle-ground awards are common.
Litigation outcomes are more variable: settlements often reflect the strength of the case, and judgments can go dramatically either way.
When to sequence both
On many complex claims, appraisal happens first (to resolve amount), then litigation follows on bad-faith if the carrier's pre-appraisal conduct warrants it. The appraisal award becomes a factual finding in the bad-faith case.
The common sequencing mistake
Filing suit before invoking appraisal on an amount-only dispute. You lose:
- The faster, cheaper resolution
- Potential settlement leverage
- Possibly jurisdiction (some policies require appraisal first)