When you and your insurance company cannot agree on the amount of damage, either party may invoke the appraisal clause found in most insurance policies. Each party chooses an appraiser and if the two appraisers cannot agree on the amount, they will choose an umpire. An agreement of two of the three is binding on the insured and insurance company. Each party pays its own appraiser and shares all other expenses relating to the appraisal process including the umpire. This is a contractual provision outlined in most policies. You should review your policy provisions for additional information.
An appraisal clause is a clause or paragraph found in most but not all insurance policies. It is designed to be a way of reaching a settlement when there is a dispute over the amount of a loss between you and your insurance company and can be invoked by either party. The appraisal clause can be utilized when there is a dispute over the cost to repair your vehicle, the value of your vehicle in a total loss claim or the diminished value of your vehicle if you reside in a state where you can make a 1st party claim for diminished value. The appraisal clause is generally found in the “Damage to Your Auto” section of your policy.
After invoking your appraisal clause, each side will select a competent appraiser to assess the loss. Each side will be responsible for paying their chosen appraiser. You should select an appraiser who is knowledgeable in the specific area that is the subject of the dispute and who is familiar with the appraisal clause process. Your selected appraiser should be able to be objective and impartial. Your appraiser should not do any work for the insurance company with whom you are having the dispute.