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The Appraisal Clause and how it applies to your total loss and diminished value claims:
The appraisal clause is afforded to an, "insured," in a first party insurance claim. For more information on difference between first and third party claims, click here. In your insurance policy there will be a section that is usually referred to as, "the appraisal clause," "appraisal," or, "rights of appraisal." This section of the policy will state something similar to: "If we and you do not agree on the amount of loss, either may demand an appraisal of the loss. In this event, each party will select a competent and impartial appraiser. The two appraisers will select an umpire. The appraisers will state separately the actual cash value and the amount of loss. If they fail to agree, they will submit their differences to the umpire. A decision agreed to by any two will be binding. Each party will:
- Pay its chosen appraiser; and
- Bear the expense of the appraisal and umpire equally.
Understanding When to Invoke the Appraisal Clause
The appraisal clause is activated when there's a dispute over the value of your vehicle. These disagreements can arise in several common—and costly—situations.
- Disagreement on a Total Loss Settlement : When your vehicle is declared a total loss, disputes may occur over its actual cash value. The appraisal clause allows you to challenge the insurer’s offer and seek a fairer settlement.
Insuring Classic or Antique Vehicles : Owners of classic or collectible cars often face challenges in getting the right coverage. If the insurer undervalues the vehicle when setting the policy or in a claim, the appraisal clause can be used to resolve the difference in insurable value.
Diminished Value Disputes: One of the most hotly contested issues in insurance today involves diminished value. If your post-repair vehicle is worth significantly less than before the accident, and the insurer's offer is too low (or nonexistent), invoking the appraisal clause may be your best recourse.
Repair Estimate Conflicts : Sometimes the disagreement isn't about market value at all—it’s about repair costs. For instance, your trusted body shop may provide a $10,000 estimate, while the insurer’s appraiser offers only $8,500. If the shop refuses to reduce its charges, you might be stuck with subpar repairs or left to cover the $1,500 gap yourself—or worse, both.
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If you don't feel that you have been made a fair offer the appraisal clause states that you have the right to contact us for an independent appraisal.
