Appraisal clause 101: when and why to invoke it
July 2026 · 5 min read · Claims & assessment
Most property insurance policies include an appraisal clause — a built-in way to resolve a dispute over the amount of loss without going to court. It's one of the most underused tools available to a policyholder who believes they're being underpaid.
What the appraisal clause actually resolves
Appraisal only settles disagreements about how much the loss is worth — not whether coverage applies in the first place. If the carrier has denied coverage outright, appraisal isn't the right tool; if they've accepted the claim but you disagree with the amount, it often is.
How the process works
- Each side (you and the insurer) selects a competent, impartial appraiser.
- The two appraisers select a neutral umpire.
- Each appraiser independently estimates the amount of loss.
- Where they agree, that figure stands. Where they disagree, the umpire decides — and agreement between any two of the three (your appraiser, the carrier's appraiser, or the umpire) is typically binding.
When it makes sense to invoke
Appraisal tends to be worth invoking when there's a large, well-documented gap between your contractor's estimate and the carrier's number, coverage itself isn't in dispute, and negotiation has stalled. It's generally faster and less expensive than litigation.
Why an independent assessment matters going in
The strength of your position in appraisal comes down to documentation: a defensible, line-item scope of loss built by someone with no stake in the outcome. That's the role an independent building consultant plays — producing the assessment and estimate your appraiser will stand behind.
If you're weighing whether to invoke the appraisal clause on a disputed claim, request a consultation to get an independent, defensible number first.