Appraisal Clause
Also called: appraisal, appraisal provision
Appraisal Clause is a provision in most property policies that lets either side resolve a disagreement about the AMOUNT of a loss outside court. Each party appoints an appraiser, the two appraisers select an umpire, and their decision sets the amount. It settles value, not coverage.
What it means
Most property policies contain an appraisal clause: a mechanism for resolving a disagreement about how much a loss is worth without going to court. Either party can invoke it. Each appoints a competent, disinterested appraiser. The two appraisers try to agree the amount, and if they cannot, they select an umpire. An award agreed by any two of the three normally settles the figure.
The critical limitation is in the first sentence. Appraisal decides amount. It is not designed to decide whether the policy covers the loss.
Why the amount-versus-coverage distinction matters
Because it determines whether appraisal is the right tool at all, and getting it wrong wastes months.
If the carrier agrees the roof has hail damage and values the repair at one figure while the contractor values it at a much higher one, that is a dispute about amount. Appraisal fits.
If the carrier says the marks on the shingles are not hail damage, or that the loss falls under an exclusion, that is a dispute about coverage. Appraisal generally does not fit, and carriers push back hard on attempts to route coverage questions through it.
Real disputes are often mixed, which is where it gets genuinely difficult and where qualified advice earns its fee. A disagreement that presents as a scope argument can rest on an underlying coverage position, and the two need separating before anyone invokes anything.
What it costs
Each side normally bears its own appraiser and the two share the umpire, subject to the policy wording. Appraisers competent enough to be worth appointing charge accordingly, and the process takes time.
That cost profile is what makes appraisal a tool for materially disputed claims rather than a general escalation route. On a modest disagreement the process can consume more than the disagreement is worth.
Where the contractor sits
Outside it. Appraisal is a provision of the insurance contract between the homeowner and the carrier, and invoking it is the policyholder’s decision, ideally taken with advice.
What a contractor properly contributes is evidence: documented scope, photographs, measurements, and a clear account of why the work is required. That material is what an appraiser appointed on the homeowner’s side will work from.
Common mistakes
Suggesting appraisal casually is the most consequential. It commits the homeowner to a binding process with costs.
The second is invoking it on a coverage dispute and losing months discovering it was the wrong mechanism.
The third is arriving at appraisal with the same undocumented position that failed to persuade the adjuster. The forum changed; the evidence problem did not.
On the call
Appraisal is a formal step with real cost and it is not a contractor's decision to invoke. If a caller raises it, capture the detail and route it to the owner or claims lead. Never suggest a homeowner invoke appraisal on the phone, because it commits them to a process and to expenses.
This is how our agents handle it on storm appointment calls and day-to-day roofing answering service intake.
Questions people ask about appraisal clause
- Can appraisal decide whether damage is covered?
- Generally no. Appraisal is designed to settle the amount of a loss, not coverage questions, and carriers routinely resist attempts to use it for the latter. Where the disagreement is whether hail caused the damage at all, appraisal is usually the wrong route.
- Who pays for appraisal?
- Each side normally pays its own appraiser and the two sides share the umpire's cost, though the policy wording governs. It is not free, which is why it makes sense on a materially disputed claim and rarely makes sense on a small one.
- Is the appraisal decision binding?
- An award agreed by two of the three participants is typically binding as to the amount, subject to the policy wording and applicable law. Because it is binding, invoking appraisal is a decision for the policyholder with proper advice, not something to be encouraged casually.
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