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What Is an Insurance Appraiser and Do You Need One?

When you file an insurance claim for a covered loss, your insurance company will appoint an insurance adjuster. This adjuster acts in the best interests of your insurance company and will try to minimize the liability of your insurer.

After your claim is processed, you’ll be provided with a settlement agreement, detailing the amount your insurer is willing to pay to settle your claim.

But what if you’ve received a lowball offer and don’t agree with your insurance company on the amount of your loss?

Many homeowners or business owners policies contain an appraisal clause that allows both you and your insurer to hire an insurance appraiser.

Appraiser determining the cost of damage to a house

Note: Avner Gat, Inc. is a licensed public adjuster in Los Angeles and can perform the duties of an insurance appraiser. Where relevant, special mention will be made to California Insurance Codes.

What Is an Insurance Appraiser?

A property insurance appraiser is someone capable of giving a professional, disinterested  opinion on the value of a loss. They have no interest or stake in the outcome.

Property insurance appraisers are typically professionals like adjusters, contractors, engineers, or anyone with relevant, specialized knowledge.

What Is the Insurance Appraisal Process?

An insurance appraisal is a process in which you and your insurer will make a good-faith attempt to resolve disputes without resorting to litigation. Note that such disputes concern the amount of loss and not coverage issues.

You are in effect requesting a second evaluation on the amount of loss after your insurance provider has made an initial determination.

It’s a good alternative to a lawsuit, according to the Insurance Appraisal and Umpire Association (IAUA), based on the following comparison:



Quick – Expedient

Slower – protracted

Relatively less costly

Generally more costly

May be less adversarial

More adversarial

No appellate potential

Appeal is possible

Must pay fees/costs

May recover fees/costs

No firm procedure

Strict procedures

Insurance Appraisers and the Appraisal Clause

Here is how the appraisal clause (broken into paragraphs for easier reading) appears in an ISO insurance HO-3 form:

If you and we fail to agree on the amount of loss, either may demand an appraisal of the loss.

In this event, each party will choose a competent and impartial appraiser within 20 days after receiving a written request from the other.

The two appraisers will choose an umpire.

If they cannot agree upon an umpire within 15 days, you or we may request that the choice be made by a judge of a court of record in the state where the “residence premises” is located.

The appraisers will separately set the amount of loss.

If the appraisers submit a written report of an agreement to us, the amount agreed upon will be 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 set the amount of loss.

Each party will:

a. Pay its own appraiser; and

b. Bear the expense of the umpire equally.”

What Is an Insurance Umpire?

Tug of war

When you and your insurer dispute the “amount of loss” either one of you can invoke an appraisal clause, if one exists. You will each hire an appraiser, and the two appraisers will choose an umpire.

If the two appraisers cannot agree on an umpire, you or your insurer may request that the choice be made by a judge in the state where your property is located.

Should the two appraisers be unable to agree on the amount of loss, they will submit their respective reports to the umpire.

A decision agreed to by any two of the three parties (the two appraisers and the umpire) will set the amount of loss.

What Is the Law in California?

Many insurance policies do not contain an appraisal clause. However, in California appraisal provisions are provided for under California Standard Form Fire Insurance Policy.

Insurance Code §2071(a) (broken into paragraphs for easier reading) states:

In case the insured and this company shall fail to agree as to the actual cash value or the amount of loss, then, on the written request of either, each shall select a competent and disinterested appraiser and notify the other of the appraiser selected within 20 days of the request.

Where the request is accepted, the appraisers shall first select a competent and disinterested umpire; and failing for 15 days to agree upon the umpire, then, on request of the insured or this company, the umpire shall be selected by a judge of a court of record in the state in which the property covered is located.

Appraisal proceedings are informal unless the insured and this company mutually agree otherwise.

For purposes of this section, “informal” means that no formal discovery shall be conducted, including depositions, interrogatories, requests for admission, or other forms of formal civil discovery, no formal rules of evidence shall be applied, and no court reporter shall be used for the proceedings.

The appraisers shall then appraise the loss, stating separately actual cash value and loss to each item; and, failing to agree, shall submit their differences, only, to the umpire.

An award in writing, so itemized, of any two when filed with this company shall determine the amount of actual cash value and loss.

Each appraiser shall be paid by the party selecting him or her and the expenses of appraisal and umpire shall be paid by the parties equally.

In the event of a government-declared disaster, as defined in the Government Code, appraisal may be requested by either the insured or this company but shall not be compelled.”

Should You Hire an Insurance Appraiser?

If you cannot reach an agreement with your insurance company over the actual cash value or amount of loss, then invoking an appraisal clause and hiring an insurance appraiser might be a good idea. It’s faster and more cost effective than litigation.

The downside of hiring an insurance appraiser is that the appraiser should be disinterested and impartial. They don’t have to act in your best interests and cannot fight for you. You have to pay their fees regardless of the outcome.

In addition, apart from determining (in their opinion) the “amount of loss,” they cannot help you to dispute coverage issues. And they can’t manage your insurance claim on your behalf.

Depending on the size and complexity of your property insurance claim, hiring a public adjuster can be more beneficial than hiring an insurance appraiser.

Unlike an insurance adjuster that acts in the best interests of your insurance company or an insurance appraiser that has to be impartial, a public adjuster acts in YOUR best interests.

A public adjuster can guide you through the entire claims process from filing your claim to negotiating with contractors and insurance adjusters on your behalf.

Avner Gat, Inc. has 17+ years of experience as a public adjuster in Southern California. We can assist you to overcome the challenges of managing your homeowners claim. And we can help you to get the best possible settlement offer you’re entitled to under your insurance policy.

Call Avner now at (818) 917-5256 to find out how we can assist you.