The appraisal process comes with its own specific vocabulary, and having a general understanding of common terms can make the process much easier to follow. Here is a short glossary of terms that come up often.
Appraisal clause: the provision within a property insurance policy that allows either the policyholder or the insurer to invoke a structured process for resolving disagreements over the dollar amount of a covered loss.
Appraiser: a person selected by either the policyholder or the insurer to independently evaluate the disputed loss, expected to be competent and disinterested under most policy language.
Umpire: a neutral third party, generally selected jointly by the two appraisers or appointed by a court if they cannot agree, who helps resolve disagreements between the two appraisers.
Award: the final dollar figure reached in the appraisal process, generally agreed to by any two of the three participants, meaning the two appraisers and the umpire.
Actual cash value and replacement cost: two common methods for calculating the value of a loss, with actual cash value generally accounting for depreciation and replacement cost generally not.
Understanding these basic terms can help you follow along more confidently if you ever find yourself navigating the appraisal process for your own claim.
This article is general education about how the appraisal process commonly works. It is not legal advice, and specific procedures can vary by state and policy. If you have questions about your own claim, review your policy language and talk with your insurance company, agent, or an attorney familiar with your state’s laws.
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.