What is the definition of an appraisal clause in insurance?
The key terms
- Amount of loss: the dollar value of the covered damage. This is what appraisal decides.
- Written demand: appraisal starts when one party asks for it in writing.
- Appraiser: each side names a competent appraiser within the number of days the policy allows. Twenty days is common wording.
- Umpire: a third person chosen by the two appraisers. If they cannot agree, many policies let either side ask a court to name one.
- Award: the written amount agreed to by any two of the three. It sets the amount of loss.
- Costs: each side usually pays its own appraiser and splits the umpire's fee and other appraisal expenses.
What the definition leaves out
The clause covers value, not coverage. Whether the policy covers a cause of damage, whether an exclusion applies, or whether you met policy conditions are coverage questions, generally decided by the insurer and, in a dispute, by a court. How far appraisers may go on cause, such as hail versus wear on one slope, depends on the policy wording and how courts have read it, so read your own policy's exact language.
Where to find it
In most homeowners policies, appraisal sits in the Section I conditions, near the loss settlement and loss payment provisions. Some policies change or remove it by endorsement, so check your declarations page and endorsements as well as the main form.
For how the clause plays out on an actual roof, see the appraisal clause on a roof claim.