How the insurance appraisal process works

What the appraisal clause says

Most homeowners and commercial property policies contain an appraisal provision modeled on standard industry wording. While the exact language varies, the typical clause provides that:

• If the insured and insurer fail to agree on the amount of loss, either may demand appraisal in writing.
• Each party chooses a competent and disinterested (or impartial) appraiser within a set time, commonly 20 days.
• The appraisers choose an umpire, commonly within 15 days, or ask a court of record in the state where the property is located to select one.
• The appraisers separately state the actual cash value and the amount of loss.
• Agreement in writing by any two of the three sets the amount of loss.
• Each party pays its own appraiser and shares the umpire and other appraisal expenses equally.

Always read your own policy. Some policies add conditions, some states regulate appraisal by statute, and some policies have no appraisal clause at all.

The appraisal process, step by step

1. Confirm the dispute is about the amount of loss. Appraisal resolves disagreements over price and scope of a covered loss. Coverage disputes generally belong elsewhere.
2. Send a written demand for appraisal. Either the policyholder or the insurer may demand appraisal in writing, following any notice requirements in the policy.
3. Each party selects an appraiser. Each side names a competent and disinterested appraiser, commonly within 20 days of the demand, and notifies the other side.
4. The appraisers select an umpire. The two appraisers agree on an umpire, commonly within 15 days. If they cannot, a court where the property is located may appoint one.
5. The appraisers evaluate the loss. Each appraiser inspects and estimates the loss, stating actual cash value and amount of loss separately for each item, and they resolve what they can.
6. Disagreements go to the umpire. The appraisers submit only their differences to the umpire, who reviews the evidence and decides those items.
7. The award is signed. A written award signed by any two of the three sets the amount of loss, and the insurer issues payment under the policy's terms.

When appraisal makes sense

• The insurer accepts the claim but its estimate is far below the cost to repair.
• There is a disagreement over scope, such as repair versus replacement, or matching.
• The dispute is over pricing, depreciation, overhead and profit, or code items.
• Both sides want a faster, lower-cost resolution than litigation.

When appraisal may not fit

If the insurer has denied the claim outright, or the disagreement is about whether a cause of loss is covered, appraisal may not resolve the issue. Some courts allow appraisers to decide causation as part of the amount of loss; others do not. Talk to a licensed attorney about coverage questions.

How long does insurance appraisal take?

Many appraisals conclude within a few weeks to a few months after the umpire is chosen. Timing depends on how quickly appraisers are named, the size and complexity of the loss, access to the property and how many items go to the umpire.

How much does insurance appraisal cost?

Under the typical clause, each party pays its own appraiser, and the umpire's fee and other appraisal expenses are split equally. Appraiser fee structures vary by firm, claim size and state rules, so ask for the fee arrangement in writing before you sign an engagement agreement.

What happens after the award

The signed award sets the amount of loss. The insurer then pays according to the policy, applying the deductible, prior payments, limits and any holdback for replacement cost until repairs are completed. The award generally does not resolve coverage defenses the insurer has reserved.

Key terms

Amount of loss

The dollar value of the covered damage, as determined in appraisal.

Replacement cost value (RCV)

The cost to repair or replace damaged property with like kind and quality, without deducting depreciation.

Actual cash value (ACV)

Generally replacement cost minus depreciation, though state law defines it differently in some places.

Disinterested appraiser

An appraiser without a financial stake or bias in the outcome of the claim.

Umpire

The neutral third person who decides items the appraisers cannot agree on.

Award

The written, signed determination of the amount of loss.

This guide is general information, not legal advice. Policy language and state law control how appraisal works on your claim. Last updated 2026-11-13.