Appraisal and Umpire Demand (Policyholder) — Arizona

APPRAISAL AND UMPIRE DEMAND — ARIZONA

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 Arizona Law
8. Timeline and Deadlines
9. Preservation of Bad Faith Claims
10. Reservation of Rights
11. Demand for Response
12. Petition to Compel Appraisal
13. Appraisal Award Form
14. Arizona-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: Formal Demand for Appraisal Under Policy Appraisal Clause
Policy Number: [________________________________]
Claim Number: [________________________________]
Date of Loss: [__/__/____]
Insured Property: [________________________________]

1. FORMAL DEMAND FOR APPRAISAL

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

This letter constitutes the formal written 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 actual cash value and/or the amount of loss arising from the [________________________________] (describe peril — e.g., monsoon storm, hail, fire, water damage) that occurred on or about [__/__/____] at the insured property located at [________________________________].

Under Arizona law, the appraisal clause is a valid, enforceable contractual provision. The Arizona Court of Appeals has recognized that "appraisal is analogous to arbitration" and that "principles of arbitration law" are applied to appraisal proceedings. Meineke v. Twin City Fire Ins. Co., 892 P.2d 1365, 1369 (Ariz. Ct. App. 1994). The Insured hereby exercises the contractual right to appraisal and demands that the process commence without delay.

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 structural damage and repair
☐ Roof damage assessment and replacement vs. repair
☐ Unit pricing for labor and materials
☐ Actual cash value and depreciation calculations
☐ Replacement cost value calculations
☐ Contents / personal property valuation
☐ Additional living expense / loss of use
☐ Code upgrade costs
☐ Overhead and profit
☐ Other: [________________________________]

4. NOMINATION OF INSURED'S APPRAISER

Pursuant to the Policy's appraisal clause, the Insured nominates the following competent and disinterested appraiser:

The nominated appraiser is competent and disinterested. [He/She] has no financial interest in the outcome beyond the appraiser's fee and no prior relationship with the Insured that would compromise impartiality.

5. CARRIER'S APPRAISER REQUEST

The Insured requests that the Carrier appoint its own competent and disinterested appraiser and provide written notice within twenty (20) days of this demand (or as the Policy provides).

Please provide:

☐ Full name
☐ Professional qualifications and licensing
☐ Firm affiliation
☐ Contact information
☐ Statement of disinterestedness

ARIZONA NOTE: Under Meineke, the appraiser must be genuinely disinterested. An appraiser who regularly works for the Carrier and derives a substantial portion of business from that relationship may be subject to challenge.

6. UMPIRE SELECTION FRAMEWORK

The two appraisers shall attempt to select a competent and disinterested umpire within fifteen (15) days of both appointments (or as the Policy provides).

Proposed Umpire Candidates:

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

If the Appraisers Cannot Agree:

Under the standard fire policy provision (A.R.S. § 20-1505), if the appraisers cannot agree on an umpire within fifteen (15) days, either party may request that a judge of a court of record select the umpire. In Arizona, this would be a Superior Court judge in the county where the property is located.

The Insured proposes:

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

7. SCOPE OF APPRAISAL UNDER ARIZONA LAW

Arizona courts have narrowed the role of appraisers to determining strictly questions of valuation, and "it is not their function to resolve questions of coverage and interpret provisions of the policy."

Within Scope (Valuation):

☐ Amount of physical damage to the property
☐ Cost to repair or replace each damaged item
☐ Actual cash value at time of loss
☐ Replacement cost value
☐ Depreciation amounts
☐ Total amount of loss

Outside Scope (Coverage/Legal Questions):

☐ Whether the loss is covered under the Policy
☐ Interpretation of Policy terms, conditions, exclusions
☐ Application of Policy sublimits or deductibles
☐ Bad faith or claims handling conduct
☐ Legal or contractual questions

Causation — Evolving Arizona Law:

☐ Arizona case law is evolving on whether appraisers may determine causation
☐ Some Arizona courts have allowed appraisal panels to address causation to the extent it is intertwined with the amount of loss
☐ Where causation is genuinely disputed and goes to coverage, the court may need to resolve causation before appraisal can proceed

ARIZONA PRACTICE NOTE — CAUSATION: Arizona courts are increasingly allowing appraisal panels to address limited causation questions — specifically, what damage was caused by the claimed peril and how much it costs to repair. However, if the carrier is asserting that the damage was caused entirely by an excluded peril (a pure coverage defense), that question remains for the court. Practitioners should be prepared to argue either position depending on the facts.

8. TIMELINE AND DEADLINES

Arizona does not have a standalone appraisal statute with specific deadlines — the Policy language controls:

TIMELINESS NOTE: Arizona courts generally disfavor waiver of appraisal rights, but a demand made more than one year after the date of loss may face challenges. File the demand promptly once a valuation dispute becomes apparent.

9. PRESERVATION OF BAD FAITH CLAIMS

THE INSURED EXPRESSLY PRESERVES ALL BAD FAITH AND EXTRA-CONTRACTUAL CLAIMS UNDER ARIZONA LAW.

Arizona recognizes the tort of bad faith in the first-party insurance context. The Insured's invocation of appraisal does not waive:

☐ Bad faith denial, delay, or underpayment — Rawlings v. Apodaca, 151 Ariz. 149, 726 P.2d 565 (1986) (establishing first-party bad faith in Arizona)
☐ Violation of A.R.S. § 20-461 et seq. — Unfair Claims Settlement Practices
☐ Violation of A.A.C. R20-6-801 — Unfair Claims Settlement Practices (administrative regulations)
☐ Breach of the implied covenant of good faith and fair dealing
☐ Punitive damages for bad faith (available in Arizona)
☐ Attorney's fees under A.R.S. § 12-341.01 (in contract actions)
☐ Any other statutory or common law remedies

ARIZONA PRACTICE NOTE — BAD FAITH: Arizona permits punitive damages in bad faith insurance cases. Rawlings v. Apodaca established that when an insurer acts unreasonably in handling a first-party claim, the insured may recover compensatory damages for emotional distress and punitive damages. The appraisal award may serve as evidence of the insurer's unreasonableness if the award significantly exceeds the carrier's pre-appraisal estimate.

10. RESERVATION OF RIGHTS

The Insured expressly reserves:

• All rights and remedies under the Policy
• All rights and remedies under Arizona insurance law, including A.R.S. Title 20
• The right to challenge the appraisal process or award on grounds of fraud, misconduct, or partiality
• The right to seek judicial review of the appraisal award (under Arizona's arbitration-analogy framework)
• The right to recover attorney's fees, costs, and interest
• All rights not expressly waived herein

11. DEMAND FOR RESPONSE

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

1. The Carrier's agreement to proceed with appraisal
2. The name and qualifications of the Carrier's appraiser
3. The Carrier's proposed timeline

Failure to participate may constitute:

• Waiver of the Carrier's appraisal rights
• Evidence of bad faith
• Grounds for judicial intervention
• A violation of A.R.S. § 20-461 (unfair claims settlement practices)

Please direct all correspondence to:

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

Respectfully submitted,

Signature: ____________________________________

Printed Name: [________________________________]

Title / Capacity: [________________________________]

Date: [__/__/____]

PART II: PETITION TO COMPEL APPRAISAL — ARIZONA SUPERIOR COURT

IN THE SUPERIOR COURT OF THE STATE OF ARIZONA
IN AND FOR THE COUNTY OF [________________________________]

MOTION TO COMPEL APPRAISAL

COMES NOW [________________________________] ("Petitioner"), by and through undersigned counsel, and respectfully moves this Court for an Order compelling [________________________________] ("Respondent") to participate in the appraisal process as provided in the parties' insurance policy.

I. LEGAL FRAMEWORK

1. Arizona courts treat appraisal as "analogous to arbitration" and apply "principles of arbitration law" to appraisal proceedings. Meineke v. Twin City Fire Ins. Co., 892 P.2d 1365, 1369 (Ariz. Ct. App. 1994).

2. The appraisal clause is a valid and enforceable contractual provision. Courts routinely enforce appraisal clauses when there is a genuine dispute over the amount of loss.

3. Arizona courts generally disfavor finding waiver of appraisal rights.

II. FACTS

4. Petitioner is the named insured under Policy No. [________________________________] issued by Respondent.

5. On or about [__/__/____], Petitioner's property at [________________________________] sustained damage from [________________________________].

6. The parties dispute the amount of loss. Petitioner estimates $[________________________________]; Respondent estimates $[________________________________].

7. On [__/__/____], Petitioner demanded appraisal and nominated [________________________________] as its appraiser.

8. Respondent has [refused to participate / failed to appoint an appraiser / failed to respond].

III. ARGUMENT

9. The dispute between the parties is a valuation dispute — precisely the type of dispute the appraisal clause is designed to resolve. Appraisers determine "strictly questions of valuation" and not "questions of coverage." The Insured's demand properly invokes the appraisal clause.

10. Because Arizona treats appraisal analogously to arbitration, this Court has the authority under arbitration principles to compel participation in the appraisal process. See A.R.S. § 12-3007 (court authority to compel arbitration under the Arizona Revised Uniform Arbitration Act).

11. Respondent's refusal to participate in appraisal constitutes a breach of the contractual appraisal provision and may constitute an unfair claims settlement practice.

IV. PRAYER FOR RELIEF

WHEREFORE, Petitioner requests that this Court:

A. Compel Respondent to participate in appraisal as provided in the Policy;

B. Require Respondent to appoint a competent and disinterested appraiser within [____] days;

C. If Respondent fails, appoint an appraiser on Respondent's behalf;

D. Appoint an umpire if the appraisers cannot agree;

E. Award attorney's fees under A.R.S. § 12-341.01;

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

Respectfully submitted,

Signature: ____________________________________

Printed Name: [________________________________]

Bar Number: [________________________________]

Firm: [________________________________]

Address: [________________________________]

Telephone: [________________________________]

Email: [________________________________]

Attorney for Petitioner

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 — ARIZONA

APPRAISAL AWARD

Claim Information:

Appraisal Panel:

AWARD DETERMINATION

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

SIGNATURES

☐ Both appraisers agree (unanimous)
☐ One appraiser and the umpire agree (majority)

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. ARIZONA-SPECIFIC PRACTICE NOTES

A. Appraisal Is Analogous to Arbitration

The leading Arizona case is Meineke v. Twin City Fire Ins. Co., 892 P.2d 1365 (Ariz. Ct. App. 1994), which established that "appraisal is analogous to arbitration" and that "principles of arbitration law" should be applied. This has significant procedural implications:

• Courts may apply the Arizona Revised Uniform Arbitration Act (A.R.S. § 12-3001 et seq.) by analogy when enforcing appraisal clauses
• Appraisal awards may receive some of the deference accorded to arbitration awards
• Challenges to appraisal awards may follow arbitration-review standards (limited grounds including fraud, misconduct, partiality, or exceeding authority)

B. Strict Valuation-Only Scope

Arizona courts have "narrowed the role of appraisers to determining strictly questions of valuation." Appraisers may not:

• Interpret the policy
• Resolve coverage disputes
• Determine liability
• Apply exclusions

C. Evolving Causation Law

Arizona's approach to causation in appraisal is evolving:

• Traditional view: Causation is a coverage question for courts only
• Emerging trend: Some Arizona courts are allowing appraisal panels to determine what damage was caused by the claimed peril as part of the valuation process
• The distinction matters: If the carrier admits some covered damage but disputes how much damage the covered peril caused, that may be within appraisal scope. If the carrier denies any covered damage occurred, that is a coverage question for the court.

D. Waiver Generally Disfavored

Arizona courts generally disfavor finding that a party has waived its right to appraisal. However, waiver may be found if:

• A party fails to demand appraisal within a reasonable time (some courts have applied a one-year standard)
• A party engages in extensive litigation conduct before demanding appraisal
• A party's conduct is clearly inconsistent with an intent to invoke appraisal

E. Bad Faith and Punitive Damages

Arizona is one of the states that permits punitive damages in bad faith insurance cases. Under Rawlings v. Apodaca, 151 Ariz. 149 (1986):

• First-party bad faith is recognized as a tort
• Compensatory damages for emotional distress are available
• Punitive damages are available for conduct that is sufficiently egregious
• The appraisal process does not shield the insurer from bad faith liability

F. Unfair Claims Settlement Practices

A.R.S. § 20-461 and A.A.C. R20-6-801 prohibit unfair claims settlement practices. An insurer's refusal to participate in appraisal or other delay tactics may implicate these provisions.

15. SOURCES AND REFERENCES

Arizona Statutes

• A.R.S. § 20-1501 — Scope of Fire Insurance Article — https://law.justia.com/codes/arizona/title-20/section-20-1501/
• A.R.S. § 20-1505 — Standard Fire Insurance Policy
• A.R.S. § 20-461 et seq. — Unfair Claims Settlement Practices
• A.R.S. § 12-3001 et seq. — Arizona Revised Uniform Arbitration Act

Arizona Case Law

• Meineke v. Twin City Fire Ins. Co., 892 P.2d 1365 (Ariz. Ct. App. 1994) — Appraisal analogous to arbitration
• Rawlings v. Apodaca, 151 Ariz. 149, 726 P.2d 565 (1986) — First-party bad faith

Arizona Administrative Code

• A.A.C. R20-6-801 — Unfair Claims Settlement Practices — https://www.law.cornell.edu/regulations/arizona/Ariz-Admin-Code-SS-R20-6-801

Legal Commentary

• Merlin Law Group, "What is the Appraisal Process in Arizona?" — https://www.propertyinsurancecoveragelaw.com/blog/what-is-the-appraisal-process-in-arizona/
• Merlin Law Group, "Arizona Insurance Appraisal — Can Costs Be Determined Before Causation?" — https://www.propertyinsurancecoveragelaw.com/blog/arizona-insurance-appraisal-can-costs-be-determined-before-causation/
• Merlin Law Group, "Insurance Appraisals in Arizona" — https://www.propertyinsurancecoveragelaw.com/blog/insurance-appraisals-in-arizona/
• Arizona Department of Insurance — Laws and Rules — https://difi.az.gov/laws

This template is provided by ezel.ai for informational purposes only and does not constitute legal advice. Arizona insurance appraisal procedures are governed by policy language, A.R.S. Title 20, and Arizona case law. An attorney licensed in Arizona 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