Resources · Appraisal clause
The appraisal clause is a provision in most property insurance policies that resolves a disagreement over the amount of a loss, not whether the loss is covered. Each side appoints a competent, disinterested appraiser; if the two appraisers disagree, a neutral umpire decides the difference, and an award agreed to by any two of the three panel members is binding.
Amount of loss, not coverage
The single most important thing to understand about the appraisal clause is its scope. It settles how much a covered loss is worth (the amount of loss) when you and your insurer can't agree on that figure. It does not decide whether something is covered, interpret policy language, or resolve a denial. Coverage questions are separate and are not what appraisal is for.
That distinction matters because it keeps the process narrow and fast. If the disagreement is purely about the dollar value of the damage, appraisal is usually the right tool. Those disputes include the scope of repairs, the cost of materials, depreciation, and Replacement Cost Value (RCV) versus Actual Cash Value (ACV).
How the process works
Although wording varies by policy, the appraisal clause generally follows the same steps:
1. Either party invokes appraisal. When negotiations over the amount stall, you or your insurer can demand appraisal in writing under the policy.
2. Each side appoints an appraiser. The policyholder and the insurer each select a competent and disinterested appraiser to value the loss independently.
3. The appraisers compare valuations. Where they agree, that figure stands. Where they disagree, the difference goes to an umpire.
4. A neutral umpire resolves the difference. The umpire reviews both positions and decides the disputed items. An award signed by any two of the three panel members (the two appraisers, or one appraiser and the umpire) is binding as to the amount of loss.
Why "disinterested" matters
The clause requires each appraiser to be competent and disinterested, meaning no financial stake in the outcome. That is why a credible appraiser's fee is set in writing up front, and never on contingency: tying compensation to the size of the award would defeat the disinterested standard the policy requires. It is also what separates an appraiser from a public adjuster, who advocates for one side.
Ironclad Assessment Group acts only as a party-appointed appraiser or as a neutral umpire. We determine the amount of loss on the merits. We do not adjust, negotiate, interpret your policy, or settle claims.
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