appraisal through car insurance

The Appraisal Clause Process

Understanding the intricacies of auto insurance can be daunting, especially when dealing with the aftermath of an auto accident. Among the myriad terms and conditions in your insurance policy, the Appraisal Clause is a critical component that every car owner should be familiar with. This guide will explore what the appraisal clause in auto insurance entails, its significance, and how it can impact your claims, particularly in scenarios of total losses or when you're dealing with a diminished value claim.

What Is the Appraisal Clause for Auto Insurance?

The appraisal clause is a clause or paragraph found in most but not all insurance policies. This clause is generally found in the “Damage to Your Auto” section of your policy. It is designed to be a way of reaching a settlement when there is a dispute over the amount of a loss between you and your insurance company and can be invoked by either party.

The appraisal clause can be utilized when there is a dispute over the cost to repair your vehicle, the value of your vehicle in a total loss claim or the diminished value of your vehicle if you reside in a state where you can make a 1st party claim for diminished value. This clause is an essential feature for those seeking a fair settlement as it offers a route to contest the insurer’s initial offer without resorting to legal action.

Ensuring Fair Settlements

The primary role of the appraisal clause is to ensure that the policyholder receives a fair settlement based on the actual cash value or the repair cost of the vehicle involved. This is particularly pertinent in situations where the vehicle has suffered significant damage but isn't deemed a total loss by the insurance company, or the repair estimates vary significantly between the insurance company's adjuster and the repair shop.

Mitigating Disputes

The use of the appraisal clause mitigates disputes by introducing a more structured negotiation process. It allows both the insurer and the insured to present their evaluations and, if necessary, bring in third-party appraisers to offer an unbiased valuation of the damages. This process helps maintain a level of transparency and fairness, potentially saving both parties time and money that might otherwise be spent in lengthy disputes or litigation.

The Appraisal Clause Process

The following are the basic steps involved in the execution of the appraisal clause of most policies.


You will write an email to your insurance company telling them that as a result of your inability to reach a mutually agreeable settlement, you are invoking the appraisal clause of your policy. You may also send a letter via certified mail to the insurance company.


In the appraisal clause process, each side will select a competent appraiser to assess the loss. Each side will be responsible for paying their chosen appraiser. You should select an appraiser who is knowledgeable in the specific area that is the subject of the dispute and who is familiar with the appraisal clause process. Your selected appraiser should be able to be objective and impartial. Your appraiser should not do any work for the insurance company with whom you are having the dispute.


Your selected appraiser as well as the appraiser selected by your insurance company will each independently appraise the loss. The two appraisers will then communicate and discuss their findings. During this process the two appraisers will attempt to reach a mutually agreeable figure. If the two appraisers are unable to reach an agreement then the two appraisers will mutually select and agree upon a third party Umpire appraiser who will review the positions and documentation of the two primary appraisers and may also do an inspection and assessment of his own. If an umpire appraiser becomes necessary, you and your insurance company will each pay half of the cost of the umpire. Then an amount agreed upon by any two of the three appraisers will be final and binding on all parties.

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The Impact of the Appraisal Clause on Policyholders

Autonomy and Empowerment

For policyholders, the appraisal clause provides a measure of control over the insurance claims process. It empowers them to contest decisions that they perceive as unfair or not reflective of the actual damages to their vehicle. This is crucial in scenarios where the policyholder believes the payout offered by the insurance does not adequately cover the damages or the actual value of the vehicle prior to the accident.

Financial Implications

Invoking the appraisal clause can also have significant financial implications. If the final appraisal is higher than the insurer's estimate, the policyholder can receive a higher payout. Conversely, if the appraisal finds that the insurer's offer was reasonable, the policyholder might end up covering the appraisal costs, depending on the terms specified in the insurance policy.

Benefits of the Appraisal Clause

The Appraisal Clause offers several benefits, making it an advantageous option for resolving valuation disputes.

  • Cost-Effective: It provides a cost-effective alternative to litigation, which can be expensive and time-consuming.
  • Faster Resolution: It typically results in a faster resolution, allowing both parties to avoid the lengthy process of court cases.
  • Fair and Impartial: The involvement of independent appraisers and, if necessary, an umpire helps ensure that the assessment process is fair and impartial, with no bias towards either party.

When to Use the Appraisal Clause

Policyholders might consider invoking the Appraisal Clause in various situations, typically when there is a significant discrepancy between the insurance adjuster’s total loss value and what the owner believes their vehicle is worth.

Partnering with Auto Claim Consultants

The appraisal clause is a powerful tool in your auto insurance policy that can significantly influence the outcome of your claims, particularly in cases of total loss or diminished value claims. Understanding how to navigate this clause can help ensure that you receive fair compensation for your vehicle's damage.

At Auto Claim Consultants, we specialize in total loss appraisals and diminished value claims. Our expertise in insurance appraisals can guide you through the complexities of the appraisal clause, ensuring that your rights are protected and you receive the maximum possible payout. If you have totaled your car or are struggling with a diminished value claim, do not hesitate to contact us. Learn more about how we can help you leverage the appraisal clause to your advantage and ensure that your insurance settlement is fair and comprehensive.

Contact Auto Claim Consultants today to get started with your claim and to explore more about our services. We are here to help you navigate the intricacies of auto insurance appraisals, empowering you to make informed decisions about your vehicle and your financial future.


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Click the link below to see how we were able to get our previous clients what they were owed.