The Maryland appraisal clause is one of the most useful – and most misunderstood – parts of a property insurance policy. Tucked into the conditions section of most homeowners, condominium and commercial forms, it gives you and your insurer a way to settle a disagreement over the amount of a covered loss without going to court. This guide explains what the clause typically says, when it fits, and where people get tripped up.
What the clause usually says
Wording differs between insurers, but most Maryland policies follow a familiar pattern. If you and the insurer fail to agree on the amount of loss, either party may demand appraisal in writing. Each side then selects a competent and disinterested appraiser, commonly within about 20 days. The two appraisers choose an umpire; if they can’t agree, either side may ask a court to select one. The appraisers each set the amount of loss, and anything they can’t agree on goes to the umpire. A written award signed by any two of the three sets the amount. Each side pays its own appraiser and shares the umpire’s cost equally.
That is the skeleton. The details – how “amount of loss” is defined, whether replacement cost and actual cash value must be stated separately, what happens if a deadline is missed – live in your specific policy and endorsements.
When appraisal is a good fit
Appraisal works best when the insurer has accepted that a covered event happened and the fight is about money. Typical examples in Maryland include:
- A hail claim in Frederick or Carroll County where the insurer pays for a few roof slopes and you believe the whole roof needs replacement.
- A derecho or tree-impact claim where both sides agree on the damaged rooms but disagree on framing, drywall and paint quantities.
- A kitchen water loss where the insurer won’t pay to replace undamaged cabinets that can no longer be matched.
- A commercial or HOA claim where overhead and profit, code upgrades or contractor pricing are in dispute.
In each case, two experienced estimators can sit down with the same evidence and narrow the gap. That is exactly what the process is designed for.
When it isn’t
Appraisal is generally not the place to argue that a claim is covered when the insurer has denied it, or to pursue complaints about how a claim was handled. If your carrier says the damage is excluded – for example, it calls water intrusion long-term seepage or treats a basement loss as flood – that is usually a coverage question. Maryland courts have looked at where the line falls between amount and coverage in particular cases, and the answer can depend on the facts and the policy. That is why a Maryland attorney should weigh in when causation or coverage is the real fight.
What a strong appraisal demand includes
A demand letter doesn’t need legal flourishes, but it should be precise. Include:
- Your name, the property address, the policy number and the claim number.
- The date and type of loss – for instance, wind damage from a September thunderstorm.
- A short statement that you disagree with the insurer’s amount of loss and are invoking the appraisal provision.
- The name and contact details of your appraiser, or a statement that one will be named within the policy’s time frame.
- A request that the insurer name its appraiser within the period the policy requires.
Send it in a way that creates a record – email with a read receipt plus certified mail is common – and keep copies. Our appraisal demand representation service can prepare the demand and take over communication with the insurer’s appraiser from there.
Maryland considerations to keep in mind
Deadlines run separately
Maryland’s general contract limitations period is three years, and state law generally does not let property policies shorten the time to sue below that. But when the clock starts can be disputed, and appraisal does not automatically pause it. Check your dates with an attorney rather than assuming appraisal protects them.
The MIA is a parallel track
The Maryland Insurance Administration takes complaints about claims handling. Filing one doesn’t replace appraisal, and appraisal doesn’t replace a complaint. Maryland’s first-party good-faith law generally begins with an MIA complaint as well, which is a legal step to take with counsel.
Documentation wins appraisals
Panels decide based on evidence. Photos taken the day of the storm, a detailed contractor estimate, roof measurements and mitigation invoices carry far more weight than general arguments. Work through the appraisal readiness checklist before you send a demand.
Common mistakes
- Invoking too early. If the insurer hasn’t finished its estimate or reinspection, wait for a final number so the dispute is clear.
- Choosing a friend or your contractor as appraiser. Someone with a stake in the repair job may not meet the “disinterested” standard, which can invite a challenge to the award.
- Ignoring the award format. An award that lumps everything together can create arguments later about depreciation or coverage. Ask for replacement cost and actual cash value to be shown separately, by coverage part.
- Forgetting recoverable depreciation. The award sets the amount; you still need to complete repairs and submit proof to collect any held-back depreciation within the policy’s time limit.
Where to go next
For a step-by-step walk-through of what happens after the demand, see the appraisal process. If you are weighing whether your gap justifies the cost, Maryland Insurance Appraiser can review the estimates and give you a straight answer – including when appraisal isn’t the right move.