What It Is, How It Works, and When to Use It
When you’re dealing with an insurance claim, whether it’s for your home, business, or vehicle,
one of the most frustrating parts can be disagreeing with the insurance company’s determination
on the amount of the loss. Maybe your roof repair estimate is way off, or your car’s total loss
payout feels like a slap in the face. What many people don’t realize is that there’s a powerful
option built into most insurance policies that can help: the appraisal clause.
What Is the Appraisal Clause?
The appraisal clause is a section in many property and auto insurance policies that give both the
insurer and the policyholder a way to resolve disputes about how much a loss is worth without
going to court.
It’s important to note: this clause doesn’t apply to whether a claim is covered, only to
disagreements over the amount of the loss.
How It Works
When there’s a dispute over the amount of a loss, either you or the insurance company can
invoke the appraisal clause (usually in writing). Here’s how it typically plays out:
1.Each side hires an appraiser, one for the policyholder and one for the insurer.
2.The appraisers try to agree on the value of the loss.
3.If they can’t agree, they select a neutral umpire.
4.Any agreement between two of the three parties is binding.
This process can be used on any policy that includes an appraisal clause but mainly with auto
and property claims.
Auto Claims: Not Just for Houses
People often think of appraisal only in terms of property claims, but it applies to auto claims too
and it’s especially useful in situations like:
- Total loss disputes – Your insurance company lowballs the value of your totaled car.
- Repair disputes – You and the insurer disagree on the scope or cost of necessary repairs.
These types of disagreements are more common than you’d think. If your car is newer, custom,
or a luxury brand, a low offer from the insurer could mean thousands of dollars left on the table.
Appraisal levels the playing field and helps you fight back fairly and legally.
When Should You Use the Appraisal Clause?
Appraisal is a smart option when:
– You agree the damage is covered but disagree on the amount.
– You’ve tried negotiating with the adjuster, but you’re at a standstill.
– You want to avoid the time and expense of a lawsuit.
Appraisal is not the right tool if the insurance company is denying coverage altogether or
questioning liability, that’s a different ballgame.
Why Don’t More People Know About This?
The appraisal clause is often buried in the fine print of your policy, and very few insurers are
quick to mention it. Unless you’re working with a seasoned public adjuster or attorney, you
might not even realize you have this option.
Final Thoughts
Whether you’re dealing with storm damage to your home or fighting for a fair payout on a totaled
car, the appraisal clause gives you a legitimate path to challenge the insurance company’s offer.
It’s not just a technicality, it’s your right.
If you think you’re being taken advantage of and want to know if your claim qualifies for
appraisal, get in touch with a professional who understands the process and can guide you every
step of the way.
The information provided in this blog is for general informational purposes only and should not be construed as legal or professional advice. Each insurance claim is unique, and individuals should seek the guidance of a qualified professional for advice tailored to their specific circumstances. Additionally, some content may have been generated with the assistance of AI. While we strive for accuracy, we recommend verifying any information before making decisions.