What is Appraisal and How Do You Prepare For It?

Please note: this article is for general informational purposes only, and does not constitute legal or claims advice. If you have questions to see if we can assist you with your specific claim, please contact us.

What is Appraisal in Property Insurance Claims?

Appraisal is a method for resolving disagreements about the value of a property loss. It's not about whether coverage exists—that's a separate legal question. Appraisal specifically addresses how much the damage is worth.

Most property insurance policies contain an appraisal clause. When the property owner and insurance company can't agree on the amount of loss, either party can invoke appraisal.

Please note: appraisal, a property insurance claim dispute resolution option, is not the same as real estate appraisal, and does not use licensed real estate home appraisers.

How the Appraisal Process Works

In appraisal:

1. Each party (the property owner and the insurance company) selects their own appraiser

2. The two appraisers attempt to agree on the amount of loss

3. If the appraisers can't agree, they select a neutral umpire

4. Any two of the three (the two appraisers and the umpire) must agree on the loss amount

5. This decision is binding on both parties

What Appraisal Determines

Appraisal addresses specific questions:

• The amount of loss (how much damage occurred)

• The cost to repair or replace damaged property

• The actual cash value of damaged items

Appraisal does NOT determine:

• Whether the policy covers the loss

• Which policy provisions apply

• Whether coverage exclusions apply

• Other policy interpretation questions

How to Prepare for Appraisal

Before Appraisal Begins:

• Gather all documentation of your property damage (photos, videos, receipts)

• Collect estimates from contractors or repair professionals

• Review your insurance policy's appraisal clause

• Understand what's being disputed (repair cost, replacement cost, scope of damage)

• Select an experienced appraiser who knows your type of property and loss

During the Appraisal Process:

• Provide your appraiser with complete documentation

• Be available for questions about your property

• Keep records of all communications

• Understand that appraisal is focused on value, not coverage

• Be prepared for the process to take several weeks or months

Documentation to Prepare:

• Photos and videos of all damage

• Original property receipts or proof of value

• Repair estimates from licensed contractors

• Previous appraisals or assessments (if available)

• Records of any emergency repairs or mitigation

• Your insurance policy and claim correspondence

Choosing an Appraiser

Your appraiser should have:

• Experience with your type of property (residential, commercial, etc.)

• Knowledge of your type of loss (fire, water, storm, etc.)

• Understanding of construction costs and repair methods

• Licensing as required in your state

• Professional reputation and references

Costs of Appraisal

Each party pays their own appraiser. The cost of the umpire (if one is hired) is typically split between the property owner and the insurance company. Appraiser fees vary based on the complexity of the loss and the time required.

When Appraisal Makes Sense

Appraisal can be useful when:

• You and your insurance company agree coverage exists but disagree on the amount

• You want a faster resolution than litigation

• The dispute is clearly about valuation, not coverage

• Both parties are willing to be bound by the outcome

You've Got Options

Appraisal is just one specific tool for resolving valuation disputes in property insurance claims. Understanding how it works and how to prepare can help you navigate this process if it becomes necessary in your claim.