Homeowners insurance protects your home and property and is supposed to relieve financial stress in the event of a loss. So, when you don’t receive the settlement claim you expect, it can be nerve-racking. But you don’t have to simply accept what you feel is an unfair settlement amount.

Whether it’s a fire damage insurance claim or a hail damage insurance claim, if you disagree with the insurance company’s valuation of your insurance claim, there are a number of alternative dispute resolutions that you can try in order to avoid taking the dispute to court. Common alternative dispute resolutions include appraisal, arbitration and mediation.


Most homeowner’s insurance policies contain an appraisal clause in the Conditions section of the form. Policyholders who are dissatisfied with the settlement amount their insurance company comes up with have the option of beginning the insurance appraisal process by invoking this clause. The insurance appraisal process is designed to settle disputes of valuation between the insurance company and the policyholder after a disagreement on the scale of damages. Hiring a trusted and qualified appraiser is key to successfully resolving a settlement dispute.


Arbitration, by definition, is the investigation and determination of a matter or matters of difference between contending parties, by one or more unofficial persons chosen by the parties, according to The Law Dictionary. Using arbitration as an alternative dispute resolution is a binding method of settling a dispute, as the arbitrator’s ruling settles the disagreement whether or not both parties agree with it. Arbitration is a method used to help avoid the time and expenses that go along with litigation. In binding arbitration, the arbitrator’s decision is final and unlikely to be modified. In non-binding arbitration, the opposing parties have the opportunity to reject the final decision and take the matter to formal trial.


Mediation is a method of alternative dispute resolution in which a neutral third party serves as a mediator to help the opposing parties reach a mutual agreement to resolve the conflict. Mediation differs from binding arbitration in the fact that the mediator has no authority to make the final decision, and both parties are participating voluntarily. The mediator helps identify potential areas of agreement between the parties and offers creative solutions in resolving the conflict. K-Factor Advocates can also serve as a mediator between the insurance agency and the insured. K-Factor’s knowledgeable and experienced team can bring an impartial and informed ear to the situation and help both parties reach a reasonable resolution.


K-Factor Advocates is a public adjusting firm that specializes in insurance claim negotiation, policy language and interpretation, and claims estimating. K-Factor’s team of public adjusters work on behalf of the policyholder. Coverage areas include Montana, Idaho, North Dakota, South Dakota, Wisconsin, Nebraska, Minnesota and Michigan.

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