When to Hire an Umpire vs. Going to Court

When you and the insurance company cannot agree on the value of your claim, you generally have two primary paths forward: the appraisal process (using an umpire) or litigation. Understanding the differences can save you significant time, money, and stress.

The Appraisal Clause Process (Umpire Route)

Most auto policies contain an appraisal clause. This allows either party to demand an appraisal when there is a disagreement over the amount of loss. Each side selects their own appraiser, and if those two appraisers cannot agree, they jointly select a neutral umpire. The decision of the appraisers (or the umpire if they cannot agree) is typically binding.

Advantages of the Appraisal Process

• Much faster than litigation (often resolved in weeks or a few months)
• Significantly less expensive than going to court
• More informal and flexible process
• You retain more control over the outcome

Disadvantages

• The umpire’s decision is usually final (limited appeal options)
• Not ideal for cases involving coverage disputes or bad faith

Litigation Route

Litigation involves filing a lawsuit against the insurance company. This path is appropriate when there are complex legal issues, allegations of bad faith, or when the amount in dispute justifies the time and expense.

Advantages of Litigation

• Ability to pursue bad faith claims and additional damages
• Full discovery process (you can obtain internal insurance company documents)
• Right to a jury trial in many cases
• Potential for precedent-setting outcomes

Disadvantages

• Extremely expensive (legal fees, expert witnesses, court costs)
• Can take years to resolve
• High stress and uncertainty

My Practical Recommendation

In most standard valuation disputes involving diminished value or total loss, the appraisal process with a qualified umpire is the smarter, faster, and more cost-effective path.

Litigation makes the most sense when there is clear evidence of bad faith claims handling, significant coverage disputes, or when the insurance company has acted in a particularly egregious manner.