Insurance appraisal in Arkansas

Whoever the parties agree on. Older Arkansas policies called for two competent and disinterested appraisers and an umpire chosen by them, and one current Arkansas endorsement we read asks for a competent and impartial appraiser from each side. In Kempner the policyholders objected to the insurers' appraiser because he had often worked for insurance companies, they told their own appraiser to stop, and the court held the resulting award did not bind them because an appraisal agreement made after a loss was revocable before the award. On licensing, the Insurance Department's Bulletin 6-2025 asks that anyone who is not a licensed adjuster, an insurer employee or an attorney, and who seeks pay from an insured for adjusting services, be reported. Check that point before you hire someone to serve for pay.

1. Ark. Code § 23-79-203 says no insurance policy may contain a condition or agreement that directly or indirectly deprives the insured of the right to trial by jury on any question of fact arising under the policy, and that any such provision is void. Arkansas had an earlier version of this rule by 1918, when Kempner applied it.

2. In Bulletin 19-89 (July 21, 1989), the Insurance Department said it had approved some policy forms with mandatory and binding arbitration or appraisal clauses by mistake. It asked insurers to file amendatory endorsements so that the procedures are voluntary and non-binding. As of October 2026 the Department's bulletin index still lists it, and the Department's 2024 clean-out of obsolete bulletins did not include it. The bulletin cites two code sections that have since changed. Section 23-79-208 is now the late-payment statute, and the arbitration act at 16-108-201 was replaced in 2011. The jury-trial statute above and the arbitration act's exclusion of insureds (Ark. Code § 16-108-230(b)) are the current anchors.

3. In Simmons Foods v. Industrial Risk Insurers (W.D. Ark. Oct. 19, 2015), a federal judge held that the insurers' demand for binding appraisal was unenforceable under § 23-79-203, so the policyholder was not required to comply and the jury would not hear that it refused. The policy there had an Arkansas endorsement saying appraisal happens only if both sides agree, that each side picks a competent and impartial appraiser, that either side may ask a judge to choose the umpire if the appraisers cannot agree, and that the result binds no one. As a second ground, the judge found the insurers had waited too long: they demanded appraisal five months after they sent their final loss figures and three months after the policyholder sued.

4. Arkansas adds a penalty for late payment. If a property insurer fails to pay a covered loss within the time stated in the policy after demand, it can owe 12 percent damages on the amount of the loss plus reasonable attorney's fees. The fee right applies when the amount recovered is within 30 percent of the amount demanded in a homeowners case, and within 20 percent in other cases (Ark. Code § 23-79-208). The Department's claims rule also asks insurers to send claim payments within 10 working days after the claim is processed (Rule 43, § 9(f)).

5. A policy cannot require suit sooner than the period for written contracts, which is five years, and a shorter provision is void (Ark. Code § 23-79-202; § 16-56-111). That gives Arkansas policyholders more room than most states to work out a number before filing.