What Is the Appraisal Process and Is It Binding in Louisiana?

When a property insurance claim turns into a dispute, many policyholders find themselves facing a frustrating choice: accept a lowball offer or engage in a lengthy, expensive legal battle. Thankfully, many insurance policies offer a third option—appraisal. This process can help resolve disagreements over the “amount of the loss,” without the time, stress, or cost of going to court.

In Louisiana, the appraisal process is commonly used in property insurance disputes. It’s a form of Alternative Dispute Resolution (ADR), but it differs from mediation or arbitration. Appraisal doesn’t decide whether damage is covered by your policy—it only determines how much the damage is worth. That distinction is important because appraisal can be extremely effective when both sides agree on coverage but disagree on the value of the repairs or replacement.

Here’s how it works. If you and your insurer can’t agree on the amount of your loss, either party can invoke the policy’s appraisal clause, usually by submitting a written request. Once the process is triggered, each side selects an appraiser—someone qualified to assess property damage and cost estimates. These appraisers are expected to act impartially, even though they are hired by each respective side. Next, the two appraisers work together to choose a neutral third party, called an umpire, who steps in if the appraisers can’t agree on a valuation. If any two of the three participants agree on a value, that becomes the final appraisal award.

One of the most common questions we hear from policyholders in Louisiana is whether the appraisal award is binding. Put simply, no, there is no law in Louisiana making appraisal award automatically binding. In fact, most Louisiana insurance policies include a provision noting that the outcome of the appraisal process is not “binding” on either party. However, in most cases, the award is legally enforceable. Louisiana courts generally enforce appraisal awards so long as the process was conducted in good faith and in accordance with the insurance policy. Courts rarely overturn these decisions unless there’s clear evidence of procedural defects like fraud, bias, or procedural misconduct.

However, it’s important to know that the appraisal process has limits. It only settles the question of how much the loss is worth and not necessarily what is covered under the policy. If there’s a fundamental disagreement about coverage—such as whether a type of damage is excluded under the policy—appraisal likely won’t resolve that. In those cases, litigation or formal negotiation may still be necessary. Further, appraisal awards are not dispositive as to whether the insurer acted in bad faith.

Despite these limitations, appraisal remains an attractive option for many property owners in Louisiana. It’s typically faster and less adversarial than a lawsuit. You don’t need to file a claim in court or go through months of legal wrangling. Instead, experienced professionals assess the damage and reach a decision based on facts and industry standards. That said, it’s not free. Each side is usually responsible for paying their own appointed appraiser, and the cost of the umpire is typically split between the parties. But for many claims, those expenses are often worth it to get to resolution more efficiently.

Appraisal is especially helpful when a policyholder believes the insurance company has undervalued the claim, but coverage is not in dispute. If your roof was damaged in a storm, for example, and the insurer offers to cover some repairs but with a minimal estimate, appraisal can help bridge that gap with little friction. On the other hand, if the insurer denies coverage altogether, appraisal may not be helpful.

If you're unsure whether your policy includes an appraisal clause, or if you're in a dispute over your property claim, it’s worth reviewing your policy carefully & speaking with Averill & Reaney – attorneys thoroughly versed in this practice area. In Louisiana, understanding the power—and the limits—of the appraisal process can help you make a more informed decision and, ideally, get you closer to a fair recovery.

‍