When a property insurance claim moves forward, most of the process happens directly between the policyholder and the insurance company. An estimate is submitted, the claim is reviewed, and in many cases both sides reach agreement on the amount of the loss without any outside involvement. Appraisal comes into play only when that agreement breaks down over one specific question: how much is the covered loss actually worth?
Many property insurance policies include a provision called the appraisal clause, typically found in the loss settlement section of the policy. This clause generally allows either the policyholder or the insurance company to invoke a structured process for resolving disagreements over the amount of a loss, without going to court. In most policies, it does not resolve questions about whether something is covered at all, only how much a covered loss is worth.
A few situations often lead policyholders to consider appraisal: a wide gap between the policyholder’s estimate and the insurance company’s estimate that ordinary back and forth cannot close, disagreement over the scope of repairs a covered loss requires, or disputes over pricing, methodology, or specific line items within an otherwise agreed scope of work.
Appraisal is typically not the right tool for a coverage dispute, such as whether a particular cause of damage is covered under the policy at all. Those questions are usually a matter for the insurance company, an attorney, or in some cases a court, rather than an appraisal panel.
Before invoking appraisal, it can help to review the appraisal clause itself, since the specific language, deadlines, and procedures vary by policy and by state. Many policies also set requirements for how a demand for appraisal must be submitted and what happens next.
This is general education, not legal or insurance advice. Appraisal clause language and procedures vary by policy and by state, so anyone considering appraisal should review their own policy and speak with their insurance company, insurance agent, or an attorney about their specific situation before deciding how to proceed.
Russ Lis is a working property insurance appraiser and umpire based in Minnesota, serving clients nationwide. Have a question about your own claim? Contact Appraisal Resolution.