Insurance appraisal is a process built into most property insurance policies for settling a disagreement about the amount of a loss without a lawsuit. The appraisal clause, sometimes called the appraisal condition, is the part of the policy that creates this process.
Most Texas property policies contain one. Under most policy language, either side can invoke it: your carrier can invoke it on you, and you can invoke it on your carrier.
Property owners who have met the term in a policy or a letter, and the contractors, public adjusters and attorneys who need a plain version to hand to a client.
Appraisal decides the amount of a loss, not whether the policy covers it. Coverage questions stay between you and your carrier, and where they are disputed, with your attorney.
There is a fuller answer on whether appraisal decides coverage.
Each side names an appraiser, the two appraisers select an umpire, and when any two of the three agree on a number, that number generally binds both sides as to the amount of the loss.
There is a fuller walkthrough on what insurance appraisal is.
A demand letter usually means appraisal is being invoked, and a response may be expected within a time set by your policy. Read it closely, do not ignore it, and get advice before that window closes.
Our appraisal demand letter guide walks through it.
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