Insurance appraisal in South Dakota
South Dakota does not let a policy force you into appraisal. State law voids policy clauses that require arbitration or cut off your right to go to court, and the Division of Insurance reads that to mean appraisal must be optional, agreed to by both sides, and not binding. If you and the carrier both want to appraise, the terms are yours to set, and the one South Dakota Supreme Court case we found shows an optional clause in use.
At a glance
- Name an appraiser
- No deadline set by law. Appraisal happens only if both sides agree to it, so the two sides agree on when each names an appraiser. The optional clause quoted in Batiz asked each side to name an able and impartial appraiser within 20 days.
- Choose an umpire
- By agreement of the parties. No state rule supplies a deadline. The clause quoted in Batiz gave the appraisers 15 days to agree on an impartial umpire.
- If they cannot agree
- No state statute or rule picks the umpire. The clause quoted in Batiz let either side ask a judge of a court of record in the state where the residence premises is located to choose one after 15 days. Check whether your policy has that term, because appraisal itself still needs both sides to agree.
- Does appraisal pause the deadline to sue?
- A policy cannot limit the time to sue (S.D. Codified Laws §§ 21-25A-3 and 53-9-6). The general contract period is six years (§ 15-2-13). We found nothing that pauses it for an agreed appraisal, so keep your own date.
- Who may serve
- None set by the statute or the Division's bulletin. The Division says South Dakota does not license property and casualty adjusters. The parties agree on who serves, and the clause in Batiz asked for impartial appraisers and an impartial umpire. More below
Deadlines in South Dakota
The clock
- Day 0Written demandBoth sides must agree to appraise
- By agreementAppraisers namedOnly if both sides agree
- By agreementUmpire chosenBy agreement, or a court appoints
- On siteInspectionBoth estimates, line by line
- The awardAward signedAny two of three
- After the awardPaymentPer policy and state rules
In most states a written demand starts a clock. In South Dakota it does not. Section 21-25A-3 voids any insurance policy provision that requires arbitration, restricts a policyholder from enforcing a right through ordinary courts, or limits the time to do so. In Bulletin 98-5 the Division of Insurance applied that rule to appraisal: a clause that lets either side demand or require appraisal is prohibited, and appraisal is allowed only as an option that both parties agree to. The Division listed the standard clause 'If you and we fail to agree on the amount of loss, either may demand an appraisal of the loss' as an example of a prohibited provision, and told insurers to refile any form that did not comply.
The Supreme Court's 2011 decision in Batiz quotes what an optional clause looks like: if you and the insurer do not agree on the amount of loss, you may agree that the issue be determined by appraisal. Each side then names an able and impartial appraiser within 20 days, the appraisers have 15 days to agree on an impartial umpire, and a decision by the appraisers or the umpire is not binding on the parties. That is one insurer's form, not a state rule, so read yours. Whatever the form says, nothing sets the timetable but the two of you once you agree. Put the terms in writing before you start: who the appraisers are, when each is named, how the umpire is chosen, what question is being decided, how the cost is split and what happens if the appraisers disagree.
What the panel decides
Whatever you agree to, usually the amount of loss
Because an appraisal here exists only by consent, its scope is whatever the written agreement says. The sensible agreement is a narrow one: the dollar amount of the damage. Whether the policy covers a loss, or whether the carrier handled the claim properly, are legal questions. The Division's bulletin treats any outcome as non-binding, so a panel cannot settle them for you.
Batiz shows the limit of what a panel's number does. The policy there let the appraisers set the amount of loss, but the Supreme Court held the appraisal provision did not change what the insurer owed under the policy's loss settlement terms. Those terms controlled whether the owner was paid actual cash value now or the amount actually spent on repairs later.
Who may serve
Neither the statute nor the Division's bulletin sets a license or any other test for an appraiser or umpire, and the Division states that South Dakota does not license property and casualty adjusters. Because both sides must agree to appraise at all, they also agree on who serves. The clause quoted in Batiz asked each side for an able and impartial appraiser and asked the appraisers for an impartial umpire. The practical standard is the one used everywhere: someone qualified to value the damage who has no stake in the result.
The award
Not binding. Bulletin 98-5 says an outcome of arbitration or appraisal cannot be made binding on the parties, and the statute protects each side's right to enforce its policy rights in ordinary court. The clause quoted in Batiz says the same in its own words. An agreed appraisal gives both sides a worked-out number to negotiate from, but it does not end the dispute by itself. If both sides choose to settle at that number, that is their own agreement to make. In Batiz, the homeowner's appraiser put the loss at $101,999.18 and the umpire at $43,921, and the homeowner argued the higher figure was the amount of loss. The Supreme Court did not adopt it, and held the dispute premature because no repairs had been made.
Points particular to South Dakota
The statute. Section 21-25A-3 says the state arbitration chapter does not apply to insurance policies, and that every policy provision requiring arbitration, restricting a policyholder or beneficiary from enforcing a right through the usual legal proceedings in ordinary tribunals, or limiting the time to do so, is void and unenforceable. It leaves arbitration agreements between insurance companies alone.
The Division's bulletin. Bulletin 98-5 was issued by the Director of the Division of Insurance on May 27, 1998. It says provisions labeled arbitration, appraisal or any other name, under which either side can demand or require a claim dispute process, are prohibited, and that any such process must be optional and agreed to by both sides. It does not affect an insurer's own appraisals made in underwriting or in processing a claim, such as an independent valuation used to set coverage amounts or apply a coinsurance clause. The Division's bulletin list, which now runs through 2026, shows no later bulletin on appraisal.
The one Supreme Court case we found. Batiz v. Fire Insurance Exchange, 2011 S.D. 35, 800 N.W.2d 726, involved a July 22, 2008 fire at a rental house. The policy said the parties 'may agree' to appraisal and that the result would not bind them. The owner's appraiser set the loss at $101,999.18, the insurer's appraiser at $38,056.71, and the umpire at $43,921. The insurer tendered payment based on the umpire's figure less depreciation, and the owner would not cash the checks. The Supreme Court affirmed judgment for the insurer, holding that the appraisal clause did not override the policy's loss settlement terms and that the owner's request for a declaration was premature because he had not repaired the house. It sent the case back so he could still challenge the actual cash value figure. The court did not discuss § 21-25A-3. We found no other South Dakota appellate decision on appraisal, though our case search was limited.
Time to sue. Because § 21-25A-3 voids clauses that limit the time to enforce policy rights, and § 53-9-6 does the same for contracts generally, a short suit deadline in a policy does not cut off a claim that is still within the legal period. The general period for a contract action is six years from when the claim accrues (S.D. Codified Laws § 15-2-13). Nothing we found says an agreed appraisal pauses that period, so note the date before you agree to appraise.
Claim-handling duties still apply. South Dakota's unfair claim practices law (S.D. Codified Laws § 58-33-67) lists failing to act within thirty days on communications about a claim, and failing to promptly explain the policy basis for a denial or compromise offer, as unfair or deceptive acts. These duties do not depend on appraisal.
Common losses in South Dakota
Each one links back to how we look at that kind of loss.
Questions
Does my South Dakota homeowners policy have an appraisal clause?
Possibly not in the usual form. South Dakota voids policy provisions that require arbitration or limit your right to go to court, and the Division of Insurance has told insurers that a clause letting either side demand appraisal is prohibited. Some policies instead say the parties may agree to appraisal, as the policy in the Batiz case did. Read the conditions section under Appraisal to see what yours says.
How long do we have to name an appraiser in South Dakota?
There is no statutory deadline. Appraisal happens only if both sides agree to it, so the timing is part of what you agree. The optional clause quoted in Batiz used 20 days to name an appraiser, but your policy may differ. Put the dates in writing before the appraisers begin.
Who chooses the umpire in South Dakota if the appraisers cannot agree?
The parties, together, unless your policy says otherwise. No South Dakota statute or rule picks the umpire. The clause quoted in Batiz let either side ask a judge of a court of record in the state to choose one after the appraisers failed to agree for 15 days, so check whether yours has that term and settle the umpire in your written agreement.
Can the appraisers decide whether my loss is covered in South Dakota?
They can decide only what you and the carrier agree to put in front of them, and the result is not binding. Coverage and bad faith are legal questions for a court, not for an agreed appraisal. In Batiz, the Supreme Court held that the appraisal clause did not change what the insurer owed under the policy's loss settlement terms.
Does demanding appraisal pause the deadline to sue in South Dakota?
We found nothing that says so. A policy cannot shorten the time you have to sue below what South Dakota law allows, and the general period for a contract claim is six years. Mark your own date and do not rely on appraisal to extend it.
Is a South Dakota appraisal result binding?
No. Under the Division's Bulletin 98-5 the outcome of arbitration or appraisal cannot be made binding on the parties, and the clause quoted in Batiz says so directly. It gives both sides a documented figure to work from, but either can still go to court.
Before you decide anything
Has a claim in South Dakota stalled on the number?
Tell us what happened and where. We'll read the policy and tell you plainly whether appraisal fits.
When you write to us
- We read the policy, the estimates on both sides and the letters that came with them.
- We tell you plainly whether appraisal fits the disagreement, and if it doesn't, who can help.
- If it fits, we confirm next steps in writing before anything starts.
Reviewed against the sources listed, October 2026. General information, not legal advice.