Alternative Dispute Resolution (ADR) for Insurance Claims

Frequently Asked Questions

What is ADR in the context of insurance claims?

Alternative Dispute Resolution (ADR) in insurance refers to methods of resolving claim disputes outside of the traditional court system. The most common ADR methods for insurance claims include the appraisal process, mediation, and arbitration. In Texas, the appraisal process is the most widely used and effective ADR method for property damage claim disputes.

What is property insurance dispute resolution?

Property insurance dispute resolution refers to the methods available to policyholders when they disagree with their insurance company's valuation of a covered loss. The most common methods include the appraisal process (built into most policies), mediation, arbitration, and litigation. The appraisal process is typically the fastest, least expensive, and most effective option for valuation disagreements.

Is the appraisal process considered ADR?

Yes. The insurance appraisal process is a form of alternative dispute resolution (ADR) specifically designed for property insurance claims. It's built into most Texas insurance policies and provides a binding resolution to disputes over the amount of loss without going to court.

What does it mean to demand appraisal on an insurance claim?

Demanding appraisal means formally invoking the appraisal clause in your insurance policy. This clause exists in most homeowners and commercial property insurance policies. It creates a binding process where independent appraisers — one for each side — evaluate the damage and determine the amount of loss. If those two appraisers can't agree, a neutral umpire makes the final determination.

How do I write a demand for appraisal letter?

A demand for appraisal letter should include:

• Your name, policy number, and claim number • A reference to the specific appraisal clause in your policy • A statement that you are invoking your right to appraisal • The name of your chosen appraiser (e.g., Marshall Services LLC) • A request that the insurer appoint their appraiser within the policy timeframe

Send the letter via certified mail with return receipt requested, or by email with delivery confirmation. Marshall Services can provide a template and guidance.

Can my insurance company refuse my demand for appraisal?

In Texas, if your policy contains an appraisal clause, the insurance company generally cannot refuse a valid demand for appraisal. The Texas Insurance Code and case law support the policyholder's right to invoke appraisal. However, the insurer may challenge the demand if there is a coverage dispute (appraisal only resolves the amount of loss, not whether damage is covered). If your insurer refuses or fails to respond within the policy-specified timeframe — usually 20 days — you may have grounds to petition the court to compel appraisal.

How long does the appraisal process take after I send the demand?

After sending your demand for appraisal, the insurer typically has 20 days to appoint their appraiser. From there, the full process usually takes 90 to 120 days. Marshall Services uses Xactimate software, drone technology, and efficient workflows to keep the timeline as short as possible.

How do I know if my insurance claim dispute qualifies for appraisal?

The appraisal process applies when there is a disagreement over the amount of a covered loss — not whether the loss is covered. If your insurer has accepted coverage but the settlement amount is in dispute, you likely qualify for appraisal. Review your policy's appraisal clause or contact us for guidance.

What is the difference between ADR and litigation for insurance disputes?

ADR methods like appraisal are faster, less expensive, and less adversarial than litigation. The appraisal process typically resolves within 90–120 days and does not require attorneys. Litigation can take years, costs tens of thousands in legal fees, and involves formal court proceedings. ADR preserves the policyholder-insurer relationship while still achieving a fair, binding outcome on the amount of loss.

Is the appraisal award enforceable in Texas?

Yes. An appraisal award signed by any two of the three parties (your appraiser, the insurer's appraiser, and the umpire) is binding and enforceable. The insurance company is legally obligated to pay the awarded amount, less any applicable deductible.

Does demanding appraisal affect my relationship with my insurer?

No. Demanding appraisal is a contractual right written into your policy. It is not adversarial — it's a standard dispute resolution process that insurance companies deal with regularly. It does not affect your coverage, your policy status, or your ability to file future claims.

Can ADR be used for commercial property insurance claims?

Absolutely. ADR methods, including the appraisal process, are widely used for commercial property insurance claims. Commercial claims often involve higher dollar amounts, more complex damage assessments, and multiple building components — making the structured ADR process especially valuable.

Do I need an attorney for ADR in Texas insurance disputes?

For the appraisal process, no attorney is required. You select an independent appraiser like Marshall Services, and the dispute is resolved through the policy's appraisal provision. However, if your dispute involves a coverage denial or bad faith claim, consulting an attorney may be advisable in addition to or instead of appraisal.

How does Marshall Services support the ADR process?

Marshall Services LLC provides professional insurance appraisal and umpire services as part of the ADR process. We conduct thorough property inspections, produce detailed Xactimate estimates, negotiate with the opposing appraiser, and — if needed — participate in the umpire determination. Our IAUA CPAU-certified team ensures a fair, evidence-based outcome.

Who pays the appraisers and umpire in an insurance appraisal?

Each side typically pays its own appraiser, and the parties generally share the neutral umpire's fee if one is needed. The policy governs the exact allocation of appraisal expenses. Fees vary with the property's size, the disputed scope, travel, documentation, and complexity, so each party should review the written engagement terms before the appraisal begins.

Can Marshall Services handle an ADR appraisal outside Texas?

Yes. Marshall Services handles property insurance appraisal assignments in Texas, Louisiana, Oklahoma, Colorado, and California, subject to availability, conflicts, and the applicable policy requirements. Because appraisal procedure and policy language can vary by jurisdiction, the engagement begins with a review of the clause and claim posture. Travel, inspection access, and scheduling are addressed before the assignment is accepted.