insurance

Appraisal (Insurance)

An insurance appraisal is a professional evaluation process used to determine the value of damaged property or to resolve disputes between policyholders and insurers about claim amounts. It can also refer to the initial valuation of property for coverage purposes when purchasing insurance.

Example

“After the kitchen fire, both the homeowner and insurance company hired independent appraisers to determine the actual cost of repairs and replacement items.”

Memory Tip

Think 'A-Price-All' - an appraisal puts a price on all the damages or property value.

Why It Matters

Appraisals ensure fair claim settlements and help resolve disputes between you and your insurer when you disagree about damage costs or property values. They provide an objective, professional assessment that can significantly impact your claim payout, potentially adding thousands of dollars to your settlement or ensuring adequate coverage limits.

Common Misconception

Many policyholders believe the insurance company's initial damage estimate is final and non-negotiable. However, you have the right to request an independent appraisal if you disagree with the insurer's assessment, and this process often results in higher claim payouts when the initial estimate was too low.

In Practice

After a hail storm damaged Lisa's roof, her insurance company's adjuster estimated $8,500 in repairs. Lisa felt this was too low and invoked the appraisal clause in her policy. She hired an independent appraiser for $750, while the insurance company selected their own. The two appraisers agreed on $14,200 in damages, and when they couldn't agree with the insurance company's figure, they brought in an umpire who set the final amount at $13,800. Lisa received an additional $5,300, making the appraisal process well worth the initial cost.

Etymology

Derived from the Old French 'aprisier' meaning 'to set a price' or 'to value,' which evolved into the modern concept of professional valuation.

Common Misspellings

appraiselapprasialappraisalapraisal

More in insurance

Other insurance terms you should know

deductibleThe amount you pay out-of-pocket before your insurance begin…insurance premiumThe amount paid periodically to an insurance company in exch…deductibleThe amount a policyholder must pay out of pocket before insu…copayA fixed amount paid by an insured person at the time of a me…coinsuranceA cost-sharing arrangement where the insured pays a percenta…out-of-pocket maximumThe most an insured person will pay for covered healthcare s…