top of page

Auto Insurance Appraisal Clause Dispute Help

​
“When negotiations fail, you may be able to invoke the appraisal clause in your auto insurance policy to resolve the dispute.”

FAQ

Does the appraisal clause apply to total loss disputes?

Yes. The appraisal clause is commonly used when there is a dispute over the actual cash value (ACV) of a totaled vehicle. If you believe your insurance company undervalued your total loss settlement, appraisal may be an available resolution method depending on your policy language.

Can the appraisal clause be used for diminished value disputes?

It depends on the policy language and the type of claim. Some policies allow appraisal for diminished value disagreements, while others may limit its use to repair or total loss valuations. Each case must be reviewed individually.

What is the difference between an appraisal and arbitration?

Appraisal focuses strictly on determining the value of a loss. Arbitration may address broader disputes, including legal liability. The appraisal clause process is typically faster and limited to valuation issues only.

Is the appraisal clause decision binding?

In most auto insurance policies, the appraisal award is binding on both parties regarding the amount of loss. However, it does not determine coverage issues or legal liability. The binding effect depends on the policy terms and state law.

Can the insurance company refuse to participate in appraisal?

If the policy contains an appraisal clause and the dispute qualifies, the insurance company generally must participate once the clause is properly invoked. However, disputes may arise regarding whether appraisal applies in a particular situation.

1 

What Is the Appraisal Clause?

It is a contractual dispute resolution process that:

  • Allows each party to select an appraiser

  • Requires those appraisers to attempt agreement

  • Permits selection of an umpire if needed

  • Results in a binding valuation decision in most policies

2

When It Applies

  • Total loss valuation disputes

  • Repair cost disputes

  • Disagreement over ACV

  • Diminished value disagreements (policy dependent)

3

Why Experience Matters

The appraisal process is technical.

It requires:

  • Understanding valuation methodology

  • Knowing when to escalate

  • Evidence presentation

  • Umpire selection strategy

  • Negotiation discipline

       Improper handling can weaken your position

bottom of page