Denied claims
What is the appraisal clause in my insurance policy?
The short answer: appraisal is your policy's built-in tiebreaker. When you and the insurer agree a loss is covered but can't agree on the dollar amount, either side can invoke it: each side hires an appraiser, the two appraisers pick an umpire, and any two of the three agreeing set the amount of loss. It's faster and cheaper than a lawsuit — but it decides how much, not whether it's covered.
How it works, step by step
- You demand appraisal in writing, citing the appraisal provision in your policy.
- Each side hires an appraiser. Yours should be experienced, independent, and able to defend a number — this is the most important choice you'll make in the process.
- The two appraisers select an umpire. If they can't agree on one, a court typically appoints the umpire.
- The panel sets the amount of loss. Any two of the three agreeing is binding — usually the two appraisers agree, or one appraiser and the umpire do.
The critical limit: amount, not coverage
This is the part that trips people up. Appraisal decides the amount of a covered loss. It does not decide whether the loss is covered. If the insurer says "this loss isn't covered at all," appraisal generally can't overturn that — courts in most states treat coverage as a legal question. Appraisal is for the fight where both sides agree it's covered and disagree on the number. If your dispute is about coverage, your rungs are appeal, a regulator complaint, or an attorney. How to write the appeal letter →
What it costs
You pay your own appraiser and split the umpire's fee with the insurer. Appraiser fees vary — flat fees or a percentage of the disputed amount are both common — and the umpire's fee is shared. Expect low thousands out of pocket. That math is why appraisal makes sense for meaningful disputes: a $40,000 gap, not a $2,000 one. Challenging low estimates first →
When to use it
Appraisal shines when the coverage question is settled and the gap is real: your contractor's line-item estimate says $85,000, the insurer says $45,000, and negotiation has stalled. It's binding, it's private, and it's usually resolved in weeks or months rather than the years a lawsuit takes. Check your policy's appraisal provision for any deadlines or conditions before you invoke it.
Insurance rules vary by state and by policy. Check your own policy documents and your state's insurance department, or talk to a licensed professional, before acting on a claim.
How appraisal works
| Step | What happens |
|---|---|
| 1. You invoke it | Written demand to the insurer, citing the policy's appraisal clause |
| 2. Each side picks an appraiser | You hire yours, they hire theirs — you pay your own |
| 3. Appraisers pick an umpire | A neutral third party both appraisers agree on |
| 4. Binding decision | Any two of the three agreeing sets the loss amount — and it's binding |
Appraisal decides how much, not whether it's covered. If the fight is about coverage, that's attorney territory.