Appraisal Clause
Definition:
A policy provision allowing disputes over the value of a loss to be resolved by independent appraisers.
Explanation:
When the homeowner and insurer disagree on claim value, each hires an appraiser. If they can’t agree, an umpire makes the final decision, keeping the dispute out of court.
Example:
If the insurer values storm damage repairs at $40,000 but your contractor estimates $70,000, the appraisal clause allows independent appraisers to decide the fair amount.
Why it matters:
This term affects how claims are handled and what payout a homeowner may receive.