What an appraisal clause generally does
Where a policy includes one, an appraisal provision lets either party demand appraisal when they disagree on the dollar amount of a loss. Each side selects an independent appraiser; the two appraisers then try to agree on a value, and if they can't, an umpire — chosen by the appraisers or a court — resolves the disagreement. The result is generally binding on the amount of loss.
What appraisal is not
Appraisal typically resolves the amount of a loss — not whether coverage applies in the first place, and not broader legal questions like bad faith or liability. It's a tool for “how much,” not “whether,” in most policies where it appears.
Not every policy has this — and terms vary
Appraisal clauses are common but not universal, and where they do exist, the exact process, deadlines, and cost-sharing rules are set by your specific policy language and can be shaped by state law. Depending on your policy and state, invoking appraisal may require a written demand, may have its own timeline, and may require each side to cover its own appraiser's cost while splitting the umpire's fee.
How to find out if yours applies
Check your policy document for a section usually titled "Appraisal" under the property damage or physical damage coverage. If you can't locate your policy, your insurer or agent can confirm whether the provision exists and how it works for your specific policy.