Appraisal and Umpire Demand (Policyholder) — Arkansas

APPRAISAL AND UMPIRE DEMAND — ARKANSAS

TABLE OF CONTENTS

1. Formal Demand for Appraisal
2. Identification of Policy and Loss
3. Statement of Valuation Dispute
4. Nomination of Insured's Appraiser
5. Carrier's Appraiser Request
6. Umpire Selection Framework
7. Scope of Appraisal Under Arkansas Law
8. Voluntary and Non-Binding Nature
9. Timeline and Deadlines
10. Preservation of Jury Trial and All Other Rights
11. Demand for Response
12. Motion to Compel Participation in Voluntary Appraisal
13. Appraisal Award Form
14. Arkansas-Specific Practice Notes
15. Sources and References

PART I: FORMAL DEMAND FOR APPRAISAL

[Send via certified mail, return receipt requested, and email]

Date: [__/__/____]

VIA CERTIFIED MAIL AND EMAIL

To:
[________________________________]
[________________________________]
[________________________________]
[________________________________]
(Carrier name, Claims Department, address, and email)

From:
[________________________________]
[________________________________]
[________________________________]
[________________________________]
(Insured name or Counsel for Insured, address, and contact information)

Re: Demand for Appraisal Under Policy Appraisal Clause — Voluntary, Non-Binding Process
Policy Number: [________________________________]
Claim Number: [________________________________]
Date of Loss: [__/__/____]
Insured Property: [________________________________]

1. FORMAL DEMAND FOR APPRAISAL

Dear [________________________________] (Claims Adjuster / Claims Manager):

This letter constitutes the demand of [________________________________] ("Insured") for appraisal of the above-referenced loss pursuant to the appraisal clause contained in Section [________________________________] of Policy No. [________________________________] ("the Policy") issued by [________________________________] ("the Carrier").

The Insured and the Carrier have been unable to agree on the amount of loss arising from the [________________________________] (describe peril) that occurred on or about [__/__/____] at the insured property located at [________________________________].

IMPORTANT ARKANSAS LAW NOTE: This demand is made with the understanding that under Arkansas law, specifically Ark. Code § 23-79-203, no insurance policy may contain any provision that "directly or indirectly deprives the insured or beneficiary of the right to trial by jury on any question of fact arising under the policy or contract." Any appraisal provision that operates as a mandatory, binding determination of the Insured's rights is void under Arkansas law.

Accordingly, this demand invokes the Policy's appraisal process as a voluntary, non-binding dispute resolution mechanism. The Insured expressly preserves its constitutional right to trial by jury under Article 2, Section 7 of the Arkansas Constitution and its statutory right under Ark. Code § 23-79-203.

2. IDENTIFICATION OF POLICY AND LOSS

3. STATEMENT OF VALUATION DISPUTE

The Insured and the Carrier disagree on the amount of loss:

Insured's Position:

Carrier's Position:

Variance: $[________________________________]

Specific disputed items:

☐ Scope of repair/replacement needed
☐ Unit pricing of labor and/or materials
☐ Actual cash value depreciation calculations
☐ Replacement cost value calculations
☐ Contents / personal property valuation
☐ Additional living expense / loss of use
☐ Overhead and profit
☐ Other: [________________________________]

4. NOMINATION OF INSURED'S APPRAISER

The Insured nominates the following individual as its appraiser:

5. CARRIER'S APPRAISER REQUEST

The Insured requests that the Carrier appoint a competent and disinterested appraiser and notify the Insured within twenty (20) days of receipt of this demand.

Please provide:

☐ Full name of the Carrier's appraiser
☐ Professional qualifications and licensing
☐ Firm affiliation
☐ Mailing address, telephone, and email

6. UMPIRE SELECTION FRAMEWORK

Once both appraisers are appointed, they shall attempt to agree on a competent and disinterested umpire within fifteen (15) days.

Proposed Umpire Candidates:

1. [________________________________] — [________________________________]
2. [________________________________] — [________________________________]
3. [________________________________] — [________________________________]

If the Appraisers Cannot Agree:

☐ Each appraiser submits a list of three (3) qualified umpire candidates; they alternate strikes until one remains
☐ Either party petitions the Circuit Court of [________________________________] County, Arkansas, for umpire appointment
☐ Other: [________________________________]

7. SCOPE OF APPRAISAL UNDER ARKANSAS LAW

The appraisal is limited to determining the amount of loss and does not resolve coverage, liability, or legal questions.

Within Scope:

☐ The actual cash value of damaged property
☐ The replacement cost value
☐ The cost to repair or replace each damaged item
☐ Depreciation amounts
☐ Total amount of loss

Outside Scope:

☐ Whether the loss is covered under the Policy
☐ Policy interpretation and exclusion application
☐ Causation disputes
☐ Bad faith or claims handling conduct
☐ Legal questions of any kind

8. VOLUNTARY AND NON-BINDING NATURE

THIS IS THE CRITICAL ARKANSAS PROVISION.

Pursuant to Ark. Code § 23-79-203 and Article 2, Section 7 of the Arkansas Constitution, the Insured makes the following express statement:

The Insured's participation in this appraisal process is VOLUNTARY and NON-BINDING. The Insured expressly reserves the right to:

☐ Accept or reject the appraisal award in whole or in part
☐ Proceed to litigation, including trial by jury, on all factual questions arising under the Policy, regardless of the appraisal result
☐ Use the appraisal result as evidence in any subsequent proceeding, but not as a binding determination
☐ Withdraw from the appraisal process at any time if the Insured determines it is not being conducted fairly

To the extent the Policy's appraisal clause purports to make the appraisal award mandatory and binding on the Insured, that provision is VOID under Ark. Code § 23-79-203, which provides:

"No insurance policy or annuity contract shall contain any condition, provision, or agreement which directly or indirectly deprives the insured or beneficiary of the right to trial by jury on any question of fact arising under the policy or contract ... All such provisions, conditions, or agreements shall be void."

The Insured does not waive any right by participating in this appraisal process, including but not limited to the constitutional and statutory right to trial by jury.

9. TIMELINE AND DEADLINES

10. PRESERVATION OF JURY TRIAL AND ALL OTHER RIGHTS

THE INSURED EXPRESSLY PRESERVES ALL RIGHTS UNDER ARKANSAS LAW, INCLUDING:

☐ The constitutional right to trial by jury (Ark. Const., Art. 2, § 7)
☐ The statutory right to jury trial on factual questions under the policy (Ark. Code § 23-79-203)
☐ All bad faith claims and extra-contractual remedies
☐ All claims under the Arkansas Deceptive Trade Practices Act (Ark. Code § 4-88-101 et seq.)
☐ The right to recover penalties under Ark. Code § 23-79-208 (12% penalty for vexatious delay in payment of claims)
☐ The right to recover attorney's fees under Ark. Code § 23-79-208
☐ All other statutory and common law remedies

ARKANSAS PRACTICE NOTE — 12% PENALTY: Ark. Code § 23-79-208 provides that if an insurer fails to pay a loss within the time specified in the policy after demand, and it is found that the failure was arbitrary and without reasonable cause, the insurer is liable for the amount of the loss, plus 12% of the loss as a penalty, plus reasonable attorney's fees. The appraisal process does not toll or waive this penalty provision.

11. DEMAND FOR RESPONSE

The Insured demands that the Carrier respond in writing within twenty (20) days, confirming:

1. Whether the Carrier agrees to participate in appraisal on a voluntary, non-binding basis
2. The name and qualifications of the Carrier's appraiser
3. The Carrier's proposed timeline

If the Carrier insists that the appraisal is mandatory and binding, the Insured reserves the right to challenge the enforceability of the appraisal clause under Ark. Code § 23-79-203.

Please direct all correspondence to:

[________________________________]
[________________________________]
[________________________________]
[________________________________]

Respectfully submitted,

Signature: ____________________________________

Printed Name: [________________________________]

Title / Capacity: [________________________________]

Date: [__/__/____]

PART II: MOTION TO COMPEL PARTICIPATION IN VOLUNTARY APPRAISAL

[Use if the Carrier refuses to participate in the appraisal process at all]

IN THE CIRCUIT COURT OF [________________________________] COUNTY, ARKANSAS

MOTION TO COMPEL PARTICIPATION IN APPRAISAL PROCESS

COMES NOW [________________________________] ("Plaintiff"), by and through undersigned counsel, and moves this Court to compel [________________________________] ("Defendant") to participate in the appraisal process provided by the parties' insurance policy, and states:

I. INTRODUCTION

1. This Motion seeks to enforce the appraisal clause in the parties' insurance policy as a voluntary, non-binding dispute resolution mechanism to determine the amount of loss. The appraisal process will not adjudicate coverage, liability, or any factual question that would deprive the Plaintiff of the right to trial by jury.

II. THE ARKANSAS LEGAL FRAMEWORK

2. Arkansas Code § 23-79-203 provides that no insurance policy "shall contain any condition, provision, or agreement which directly or indirectly deprives the insured or beneficiary of the right to trial by jury on any question of fact arising under the policy or contract."

3. To the extent the Policy's appraisal clause is interpreted as voluntary and non-binding, it does not violate § 23-79-203 because it does not deprive any party of the right to jury trial — the appraisal result is advisory, and either party may still proceed to trial.

4. Many standard property insurance policies include appraisal clauses that, when properly construed under Arkansas law, serve as non-binding valuation procedures. The Arkansas Insurance Department has indicated that policy language must reference that appraisal procedures are voluntary and non-binding to comply with § 23-79-203.

III. FACTS

5. Plaintiff is the named insured under Policy No. [________________________________] issued by Defendant.

6. On or about [__/__/____], Plaintiff's property sustained damage from [________________________________].

7. The parties agree [or: Defendant has not denied] that the loss is covered. The dispute is over the amount of loss.

8. On [__/__/____], Plaintiff demanded appraisal. Defendant has refused to participate.

9. Appraisal would serve the interests of judicial economy and promote resolution of the valuation dispute without the time and expense of full litigation.

IV. PRAYER FOR RELIEF

WHEREFORE, Plaintiff respectfully requests that this Court:

A. Order Defendant to participate in the appraisal process on a voluntary, non-binding basis;

B. Require Defendant to appoint an appraiser within [____] days;

C. Preserve all parties' rights to trial by jury on all factual questions;

D. Award Plaintiff attorney's fees and costs;

E. Grant such other relief as the Court deems just.

Respectfully submitted,

Signature: ____________________________________

Printed Name: [________________________________]

Bar Number: [________________________________]

Firm: [________________________________]

Address: [________________________________]

Telephone: [________________________________]

Email: [________________________________]

Attorney for Plaintiff

CERTIFICATE OF SERVICE

I HEREBY CERTIFY that on [__/__/____], a true and correct copy of the foregoing was served upon:

[________________________________]
[________________________________]

by [________________________________].

Signature: ____________________________________

PART III: APPRAISAL AWARD FORM — ARKANSAS (NON-BINDING)

APPRAISAL AWARD — VOLUNTARY AND NON-BINDING

THIS AWARD IS NON-BINDING UNDER ARKANSAS LAW AND DOES NOT DEPRIVE EITHER PARTY OF THE RIGHT TO TRIAL BY JURY UNDER ARK. CODE § 23-79-203.

Claim Information:

Appraisal Panel:

AWARD DETERMINATION

The undersigned have inspected the damaged property, reviewed documentation, and deliberated. We determine the amount of loss as follows:

This award represents the appraisal panel's determination of the amount of loss only. It does not determine coverage, causation, liability, or any other legal question. Either party retains the right to proceed to litigation and trial by jury.

SIGNATURES

Insured's Appraiser:

Signature: ____________________________________ Date: [__/__/____]

Printed Name: [________________________________]

☐ Agrees ☐ Dissents

Carrier's Appraiser:

Signature: ____________________________________ Date: [__/__/____]

Printed Name: [________________________________]

☐ Agrees ☐ Dissents

Umpire (if applicable):

Signature: ____________________________________ Date: [__/__/____]

Printed Name: [________________________________]

☐ Agrees

14. ARKANSAS-SPECIFIC PRACTICE NOTES

A. The Ark. Code § 23-79-203 Problem

Arkansas is unusual in the appraisal landscape. The statute flatly prohibits any insurance policy provision that "directly or indirectly deprives the insured or beneficiary of the right to trial by jury on any question of fact arising under the policy or contract." This creates a significant obstacle for traditional binding appraisal clauses.

Key implications:

• A mandatory, binding appraisal clause that requires the insured to accept the appraisal award as final may be void under § 23-79-203
• The Arkansas Insurance Department has indicated that to be acceptable, policy language must state that appraisal/arbitration procedures are voluntary and non-binding
• This does not mean appraisal is "illegal" in Arkansas — it means appraisal must be structured as a non-binding, voluntary process

B. Constitutional Foundation

The prohibition is rooted in the Arkansas Constitution, Article 2, Section 7, which guarantees the right of trial by jury. Arkansas courts have interpreted this protection broadly in the insurance context, viewing mandatory appraisal as an impermissible substitute for the jury's factfinding role.

C. Strategic Considerations for Arkansas Practitioners

For the Insured:

• If the policy contains a mandatory binding appraisal clause, you can argue it is void under § 23-79-203
• You may still voluntarily participate in appraisal as a non-binding dispute resolution tool while preserving jury trial rights
• The appraisal result can be used as evidence in subsequent litigation but is not dispositive

For the Insured invoking appraisal:

• Explicitly state in the demand letter that participation is voluntary and non-binding
• Preserve jury trial rights in writing
• Use the appraisal to establish a professional valuation that may support a favorable settlement or serve as evidence at trial

D. The 12% Penalty Under § 23-79-208

Arkansas Code § 23-79-208 provides a statutory remedy for vexatious delay:

• If the insurer fails to pay a loss within the time specified in the policy after demand
• And the failure was "arbitrary and without reasonable cause"
• The insurer is liable for the loss amount plus 12% penalty plus reasonable attorney's fees
• Participation in a voluntary appraisal process does not toll or waive this penalty

E. Practical Approach

Given the legal complexity, Arkansas practitioners should consider:

1. Demand appraisal explicitly on a voluntary, non-binding basis — this avoids the § 23-79-203 issue while still getting a professional valuation
2. Use the appraisal result strategically — even though non-binding, an appraisal award favorable to the insured puts significant pressure on the carrier to settle
3. Preserve all rights in writing — every communication should reference § 23-79-203 and the right to jury trial
4. Consider mediation as an alternative — if the carrier objects to appraisal based on the binding issue, mediation may be a practical substitute

15. SOURCES AND REFERENCES

Arkansas Statutes

• Ark. Code § 23-79-203 — Prohibition on Jury Trial Deprivation — https://law.justia.com/codes/arkansas/title-23/subtitle-3/chapter-79/subchapter-2/
• Ark. Code § 23-79-208 — Vexatious Delay Penalty
• Ark. Code § 23-79-101 et seq. — Insurance Policies Generally
• Arkansas Constitution, Art. 2, § 7 — Right to Jury Trial

Legal Commentary

• Merlin Law Group, "Is Appraisal Illegal in Arkansas?" — https://www.propertyinsurancecoveragelaw.com/blog/is-appraisal-illegal-in-arkansas/
• ALFA International, "Arkansas Insurance Law Compendium" — https://www.alfainternational.com/compendium/insurance-law/arkansas/

Arkansas Insurance Department

• Arkansas Insurance Department, Code Search — https://portal.arkansas.gov/service/arkansas-code-search-laws-and-statutes/
• Insurance Filing Rules — Rule 23, Property, Casualty, Surety and Marine Rate and Form Filings — https://www.law.cornell.edu/regulations/arkansas/054-00-05-Ark-Code-R-004

This template is provided by ezel.ai for informational purposes only and does not constitute legal advice. Arkansas law imposes unique restrictions on appraisal clauses in insurance policies under Ark. Code § 23-79-203. An attorney licensed in Arkansas should review and customize this template before use. Laws and procedures may have changed since the last update of this template.

Last updated: 2026-02-26