What the Appraisal Clause Actually Is
The appraisal clause is a dispute-resolution mechanism already built into most property insurance policies, specifically for disagreements over the amount of an already-acknowledged, covered loss. It is not a lawsuit, and it is not a request to a different adjuster. It is a formal, named contractual process, and once properly invoked, its outcome is binding on both the homeowner and the carrier.
How the Process Works, Step by Step
- Each party, the homeowner and the insurer, selects its own appraiser.
- The two appraisers then select a neutral umpire to break any disagreement between them.
- The resulting decision on the disputed amount of loss is binding on both sides.
That structure is deliberately balanced. Neither side’s appraiser has the final say alone, and the neutral umpire exists specifically to resolve exactly the kind of disagreement that made appraisal necessary in the first place.
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Book a Roofing CallAppraisal Is Not a Bigger Supplement Request
A supplement, covered in full in this site’s guide to supplements and Xactimate for sales teams, is a request to the same adjuster to reconsider or add line items within the ordinary claims-handling process. Appraisal is a structurally different move. It routes the dispute entirely outside that ordinary process, to two independent appraisers and a neutral umpire, rather than asking the original adjuster to simply reconsider.
Treating appraisal as just a more forceful supplement request misunderstands what the clause actually does. It is a separate, formal escalation path, not a louder version of the same ask.
Can an Insurer Refuse to Participate?
Not once the clause has been properly invoked. Improperly refusing to participate in a properly-invoked appraisal is itself a potential breach of contract on the insurer’s part. That is a meaningful point of leverage for a homeowner who assumed an underpaid claim simply had to be accepted as final.
When Appraisal Makes Sense
Appraisal fits a specific situation: the carrier acknowledges the damage and the claim is covered, but the two sides genuinely cannot agree on the dollar amount after a real, good faith opportunity to investigate on both sides. It is not the right tool for a flat coverage denial, which is a different kind of dispute entirely, covered in this site’s guide to the claim denial appeal and reinspection process.
What this means for you
- Appraisal is a formal, binding dispute-resolution process for disagreements over the amount of an already-acknowledged, covered loss, not a coverage fight.
- The process has three steps: each side selects its own appraiser, the two appraisers select a neutral umpire, and the resulting decision on the amount is binding on both parties.
- Once properly invoked, an insurer cannot rightfully refuse to participate; doing so is itself a potential breach of contract.
Sources
The external data in this guide draws on the sources below. Figures described in the text as estimates or industry triangulations are directional and are not attributed to a single dataset.
- Merlin Law Group, appraisal process explained
- Property Insurance Coverage Law Blog (Merlin Law Group), appraisal and denial analysis