One of the more common questions about the appraisal process is who actually has the right to start it. The answer depends on the specific policy, but in many property insurance policies, either the policyholder or the insurance company can invoke appraisal when they disagree with the other side over the dollar amount of a covered loss.
This mutual right is one of the defining features of the appraisal clause. It is not a tool reserved for just one side. A policyholder who believes an offered settlement is too low can demand appraisal, and an insurance company that believes a policyholder’s estimate is too high can demand it as well.
In practice, appraisal is often invoked after the two sides have already exchanged estimates or gone back and forth on a settlement amount and reached a standstill. Either party can decide at that point that a neutral, structured process is a better path forward than continuing to negotiate informally.
It is worth noting that appraisal generally applies only to disputes about the amount of a covered loss, not to whether a claim is covered under the policy at all. If the disagreement is about coverage itself, appraisal is typically not the appropriate process, and other options may apply instead.
Some policies include specific language about how a demand for appraisal must be made, such as requiring it in writing or within a certain time frame. Reviewing the exact wording of your own policy’s appraisal clause is the best way to understand your specific rights and any steps you need to follow.
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 are considering appraisal for 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.