Property Insurance

What is the appraisal process in property insurance?

Property insurance appraisal is a contractual third-party valuation process. Each side picks an appraiser, the two appraisers pick an umpire, and the panel issues a binding award on the amount of loss. Appraisal resolves how much, not whether — coverage denials are not within its scope.

Most property policies contain an appraisal clause. Either side can demand appraisal when there's a dispute over the amount of loss (not coverage). The clause is contractual; it overrides litigation when properly invoked.

How it works.

Each side picks a competent, disinterested appraiser. The two appraisers select an umpire (or the court appoints one if they can't agree). The panel reviews the loss, hears each side's evidence, and issues a written award binding on both parties as to the amount of loss. Two of three panel members must agree.

What appraisal can and cannot do.

Appraisal decides amount, not coverage. If the insurer denies coverage entirely, appraisal is not the remedy — a coverage lawsuit is. If the insurer accepts coverage but disputes the amount, appraisal is often faster and cheaper than litigation.

Strategic considerations.

Picking the right appraiser matters more than the rules suggest. Appraisers should be licensed contractors or public adjusters with substantial loss-evaluation experience, ideally with prior umpire roles in similar cases. The umpire selection often determines the outcome; the two side-appraisers usually anchor toward their advocates, and the umpire breaks ties.

For more strategy, see our first-party insurance practice page.

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