What is the appraisal clause in a policy used to do?
Short answer. The appraisal clause is used to resolve a disagreement between the policyholder and the insurer about the amount of a loss, when both agree the loss is covered. It is not used to decide whether the policy covers the loss, to punish bad faith, or to replace a lawsuit over coverage.
What it is used to resolve
- Price differences between the insurer's estimate and a contractor's estimate.
- Scope differences: how many squares, which slopes, and which accessories such as ridge vent, drip edge or flashing.
- Repair versus replacement on damage the insurer already accepted, depending on policy wording and how courts have treated it.
- The value of contents or other structures damaged in the same event.
What it is not used for
- Overturning a denial based on an exclusion like wear and tear.
- Deciding whether you met policy conditions, such as timely notice.
- Awarding bad faith penalties or attorney's fees. In Georgia those come from separate law, such as O.C.G.A. 33-4-6, through the courts.
- Interpreting what the policy language means.
Why the distinction matters on a roof
Many roof disputes mix the two. If the insurer agrees three slopes have hail but calls the fourth worn out, the fourth slope is arguably a coverage or causation question, while the cost to fix the first three is an amount question. How much causation appraisers may weigh depends on the policy and on court rulings, so get advice before relying on appraisal for a mixed dispute.
Related reading: the appraisal clause on a roof claim and partial roof replacement and matching.