Appraisal Terms Every Policyholder Should Know: A Glossary

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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 is general educational material on the appraisal process rather than legal advice, and the specifics can vary with each state and policy. If you have questions about your own claim, review your policy language and talk with the insurance company, agent, or an attorney familiar with your state’s laws.

Russ Lis is an independent property insurance appraiser and umpire in Minnesota who serves clients nationwide. Have a question about your own claim? Contact Appraisal Resolution.