Occasionally, an attorney representing an insured will run into a Motion to Compel Appraisal filed by the carrier’s attorney. Upon receipt of the motion, a few considerations must be made with the most important being:

  1. Is the demand for appraisal timely? and
  2. Is appraisal proper considering the “amount of loss”?

There are differences between states as to what determinations appraisers can make concerning the “amount of loss.” For this blog, I am focusing solely on New Jersey, as I have argued against the carrier’s motion numerous times with success.

In terms of the timeliness aspect, arguments may be made that the carrier’s Motion to Compel Appraisal is untimely because the carrier waited until the policyholder spent the resources to retain an attorney, file a Complaint, and put the matter in litigation. This argument rings hollow in New Jersey as the mere fact that a lawsuit has been started does not bar the appraisal requirement.1

The second consideration is what is meant by failing to agree on the “amount of loss”. The case I have relied on in relation to this argument is German Automotive of Tinton Falls, Inc v. Harleysville Insurance Co. of New Jersey.2 In German Automotive, the insureds sought to compel appraisal when there was a dispute regarding the scope of the loss. The New Jersey Appellate Division found the policy language provided the appraisal process only pertained to a dispute as to the “amount of the loss” and would not expand the provision to include a dispute regarding the scope of loss. It further elaborated that “the appraisal process is not intended to resolve disputes as to the extent of damage, the scope of work required, or the cause of the damage”

To put it in perspective, a house burning to the ground with both sides agreeing that the house needs to be completely rebuilt and the only dispute being the cost of rebuilding the house, would be considered an “amount of loss” issue and appraisable in New Jersey. However, an extent of damage issue such as repairing v. replacing a roof would likely not be considered appraisable by a New Jersey Court.

It is important to note that appraisers in New Jersey cannot determine causation. This is in contrast to certain states, such as Florida, as stated in Ashley Harris’s blog below on Florida Appraisals.


Some might read this and wonder why a policyholder would oppose a Motion to Compel Appraisal. The answer: There can be differences of opinion between the parties as to what is going to be appraised. I have seen many instances where insureds agreed to appraisal believing the entire scope of their estimate would be appraised, only to find that the carrier was only looking to appraise the scope of its own estimate. Agreeing to a Motion to Compel Appraisal in New Jersey could lead to this pitfall and time wasted arguing which estimate’s scope is going to be considered.

The above issue and other potential pitfalls will be discussed in a future blog where I will advise as to what parameters should be delineated when sending an insurance carrier a demand for appraisal.
1 Shearer v. State Farm Fire & Cas. Co., 2017 U.S. Dist. LEXIS 134025, at *9 (D.N.J. Aug. 22, 2017); Rock-N-Rolls Auto Salon, Inc. v. U.S. Fid. & Guar. Co., 2006 N.J. Super. Unpub. LEXIS 2439, at *2 (App. Div. June 20, 2006).
2 A-2571-13T3, 2014 N.J. Super. Unpub. LEXIS 1952 (App. Div. July 29, 2014).