Appraisal characteristics
- Binding on amount of loss
- Not binding on coverage (can't resolve coverage disputes)
- Three-person panel (two appraisers + umpire)
- Each side pays own appraiser; umpire split
- Generally 2-4 months
- Invoked by either party under policy clause
Mediation characteristics
- Non-binding (either side can walk)
- Policyholder pays nothing typically; carrier pays ~$350
- Single mediator; both parties present
- Single session, typically 2-4 hours
- Generally 2-8 weeks to schedule
- Requires DFS approval for state-sponsored
When each wins
Appraisal wins
- Coverage agreed; amount disputed
- Scope is fully documented
- Expert reports available
- Binding outcome desired
- Willing to pay your own appraiser
Mediation wins
- Both parties want to resolve
- Scope / coverage somewhat disputable both ways
- Fast resolution preferred
- Low cost matters
- Flexibility in outcome valuable
When each loses
Appraisal loses
- Coverage dispute underlying
- Scope documentation incomplete
- Panel selection unfavorable
- Long appraisal timeline problematic
Mediation loses
- Carrier unwilling to negotiate
- No flexibility on either side
- Coverage categorically denied
- Need binding resolution
The sequence question
For many claims, both tools apply but in sequence:
- Mediation first: low-cost exploration of settlement possibility
- Appraisal if mediation fails: binding resolution on amount
- Both within the claim timeline: neither forecloses the other
Practical decision framework
Ask:
- Is coverage agreed? (If no → not appraisal)
- Is scope fully documented? (If no → not appraisal yet)
- Is binding outcome needed? (If yes → appraisal; if no → mediation)
- Is cost a factor? (If yes → mediation first)
- Are both parties engaging? (If yes → mediation; if no → skip to appraisal)