The appraisal clause: settling a dispute over the amount

What the appraisal clause does

A Washington Senate bill report on the state's 2025 law notes that most collision and comprehensive coverages in auto policies provide for appraisal when the insurer and the insured can't agree on the value of a loss. The wording varies by company and state, but the clause usually follows the same pattern, and Washington's statute, RCW 48.18.620, now writes that pattern into law:

• A written demand. Either you or the insurer can demand appraisal when you disagree on the amount of loss or the car's actual cash value.
• Two appraisers. Each side picks a competent and disinterested appraiser.
• An umpire. The two appraisers choose an umpire, who decides the points they can't settle.
• A binding amount. An amount agreed by both appraisers, or by one appraiser and the umpire, sets the loss.
• Shared costs. Each side pays its own appraiser and the umpire's cost is split equally.

Read your own policy for the exact terms. Look in the part that covers damage to your car, often called the physical damage or collision and comprehensive section, for a heading such as "Appraisal."

The amount, not coverage

Appraisal answers one question: how much. Texas's 2025 appraisal law, Insurance Code §1813.003(b), quoted in the Department of Insurance's 2026 rules, says the process is meant "solely to determine the amount of loss" when that amount is in dispute, and the rules add that an appraisal doesn't affect the policy's terms. Washington's bill report notes that its courts have found appraisal awards conclusive as to the amount of loss, except for bias or lack of disinterestedness by an appraiser or the umpire.

• Good fits: a repair estimate you think is short, a total loss value you think is low, the cost of hidden damage.
• Poor fits: a denial of coverage, an exclusion, a dispute over who caused the crash, or a claim that the policy had lapsed. Those go to a review, a complaint or a court; see denied claims.
• Other drivers' insurers: the clause is part of your own policy, so it usually doesn't apply to a claim against someone else's insurer. North Carolina is an exception for diminished value claims, by statute.

How appraisal runs, step by step

1. Try to settle first. Send your own estimate or valuation and ask for a written answer. Appraisal costs money, and a good rebuttal sometimes ends the dispute.
2. Send a written demand for appraisal that names the claim, the amount in dispute and the clause you rely on. Keep proof of delivery.
3. Name your appraiser within the deadline in your policy or state law, and tell the insurer who it is.
4. The appraisers inspect and compare. They look at the car or its records, the estimates and the valuation reports, and try to agree.
5. The umpire steps in if they don't agree. If they can't agree on an umpire, many clauses and state laws let a court or the regulator name one.
6. The award is written. Once two of the three sign, the insurer pays under the policy, which usually means the amount set minus your deductible and anything already paid.

Timing matters. Your policy may not say when appraisal must be demanded, but you shouldn't wait: the policy's time limit for legal action and your state's deadline to sue keep running. Under the new Texas rules, for example, a demand generally has to be made before the policy's suit limitation period ends. The insurer can demand appraisal too, and if it does, the same steps apply to you.

The states that now require appraisal

Until these laws reach your policy at its next renewal, the clause already in it, if any, still governs. Texas notes that policies delivered, issued or renewed before March 1, 2027 keep their existing appraisal terms. Other states offer different tools: Connecticut runs a state auto arbitration program for disputes over the amount of damage, described on its state page.

Is appraisal worth it?

Appraisal is usually faster and cheaper than a lawsuit, but it isn't free. You pay your own appraiser and a share of the umpire, and those costs come out of whatever the appraisal adds. It makes the most sense when the gap between your figure and the insurer's is large compared with those fees, and when you have evidence an appraiser can use: a detailed shop estimate, close comparable cars, records of upgrades.

Ask first how the fees work, and keep in mind that the umpire may land closer to the insurer's number than to yours. If the insurer also refuses to explain itself or misses its deadlines, a complaint to your state insurance department can run alongside; see low settlement offers for the steps before appraisal.

Questions people ask