Appraisal clause
The appraisal clause is a provision in many auto policies that lets each side name an appraiser and settle a disputed loss value through a defined process.
Collision Bureau is not a law firm and this is not legal or medical advice. It is general information about what happens after a crash. For advice on your situation, talk to an attorney licensed in your state or a treating clinician.
What it means
The appraisal clause is a provision written into many auto insurance policies that gives either side a path out of a dollar-amount deadlock. If the insurer and the policyholder cannot agree on the amount of a covered loss, either party can invoke the clause. Each side then names its own appraiser, the two appraisers agree on a value, and if they cannot agree, a neutral umpire resolves the gap. The result is binding on the dollar amount of the loss.
How the process works in general terms
The specifics vary by policy, but the structure usually runs in the same order. One side sends written notice invoking the clause. Each side names an appraiser within a defined period. The two appraisers select an umpire, often with court help if they cannot agree. Each appraiser prepares an opinion of value, the two compare, and any point of agreement between them sets the value. Where they disagree, the umpire's decision between the two numbers resolves the issue, and the signed award closes out the amount question.
Where it comes up after a crash
The clause lives on the valuation lane. Two scenarios bring it out often enough to be worth naming. First, a total-loss claim where the actual-cash-value number offered by the insurer does not match the policyholder's view, usually supported by comparable listings or an independent appraisal. Second, a disputed repair where the insurer's estimate and the repair facility's estimate for returning the vehicle to pre-loss condition do not line up. In both, the clause gives the dispute a private, defined channel rather than a court filing.
What it is not
The appraisal clause is not a tool for coverage disputes. If the fight is over whether the loss is covered under the policy at all, the clause typically does not apply, and a different process handles that question. It is not available for claims against another driver's liability policy, since the clause lives inside the policyholder's own contract. And it is not the same as arbitration or mediation, both of which are separate processes with their own rules. For a specific claim, an attorney in your state is the right source on whether invoking the clause is the right move.
Questions people actually ask
01When would the appraisal clause get used?
It is designed for a loss where the two sides agree a claim is covered but disagree on how much the insurer should pay. A total-loss valuation and a disputed repair estimate are the most common examples. The clause is not used for coverage disputes about whether the policy applies at all. Which disputes qualify, and whether invoking the clause is the right move on a specific claim, are questions for an attorney licensed in your state.
02Who pays for an appraisal under the clause?
In most forms of the clause, each side pays its own appraiser, and the two sides split the umpire's fee if an umpire is needed to resolve a disagreement between the two appraisers. The specific allocation is set by the policy wording and sometimes modified by state law. For a specific policy, the costs are listed in the appraisal provision itself and in any state-law overlays an attorney in your state can review.
03Is the appraisal result binding?
In most forms of the clause, the resulting amount is binding on the parties as to the dollar value of the loss, which is the issue the clause was invoked to settle. The clause typically does not decide questions outside loss amount, such as coverage, bad faith, or liability. The binding effect of a specific appraisal award, and the limits of what it decides, depend on the policy language and state law, which an attorney can walk through.