When is an appraisal needed and how can it be requested?

• A. Only after a court order
• B. If insured and insurer disagree about value, either may demand a written appraisal
• C. Automatically after loss
• D. Appraisals are never used

Answer: (B)

If there’s a dispute about how much a loss is worth, an appraisal is the method the policy provides to settle that value question. It isn’t automatic after every loss, and it doesn’t require a court order. Either the insured or the insurer can request a written appraisal by following the policy’s appraisal clause.

Once a written demand is made, each side appoints an appraiser who will review the claim and share their opinion on value. If the two appraisers can’t agree, they bring in an umpire to help settle the difference. The appraisers and umpire then produce a final value, which becomes binding on the amount of the loss. This process focuses only on value; other coverage issues aren’t decided by the appraisal. Costs are usually shared between the parties unless the policy says otherwise.