Knowledge Center
What Is Right of Appraisal in Auto Insurance?
An introduction to the Right of Appraisal, where it comes from, and how it may apply to valuation disagreements under an insurance policy.
The Term "Right of Appraisal"
When people refer to the "Right of Appraisal" in the context of auto insurance, they are generally referring to a contractual right — found in some insurance policies — to invoke a formal appraisal process when a disagreement arises over the value of a vehicle or the amount of a loss.
The right itself comes from the applicable insurance policy. In some jurisdictions, state law may also affect whether an appraisal provision is required, how it must function, or what rights parties have under it. The controlling authority is always the specific policy language and applicable law — not a universal standard.
Not every auto insurance policy contains an appraisal clause. Whether a right of appraisal exists in a particular situation depends on the policy in question. Reviewing the actual policy is the essential first step.
Where Does the Right Come From?
The right of appraisal is a contractual right — it exists because the insurance policy says it does. The policy defines the scope of the right, the procedure for invoking it, the qualifications and selection of appraisers, the role of an umpire if needed, and the effect of an appraisal award.
In some states, insurance regulations or statutes may require that certain types of policies include an appraisal provision, or may establish minimum requirements for how such provisions must function. However, the existence and scope of state-specific requirements vary significantly. State-specific information will be addressed separately.
Because the right is contractual, the exact language of the policy matters. Two policies from different insurers — or even two policies from the same insurer — may contain appraisal provisions that differ in meaningful ways.
What Types of Disagreements May Appraisal Address?
Appraisal provisions are generally designed to address disagreements over vehicle value or the amount of a loss — not every type of insurance dispute. The following are examples of the types of issues that may potentially be within the scope of an applicable appraisal provision. Whether any particular issue is appraisable depends on the specific policy language and applicable law:
- Actual Cash Value (ACV) — the fair market value of a vehicle at the time of loss
- Total-loss vehicle valuation — disputes over the value assigned to a vehicle declared a total loss
- Amount of physical damage or repair costs — when parties disagree over the scope or cost of repairs
- Other amount-of-loss issues — depending on the policy, other valuation-related disputes may fall within the appraisal provision's scope
Appraisal is generally not designed to determine insurance coverage, legal liability, causation, bad faith, or other legal questions. The boundary between appraisable amount-of-loss issues and non-appraisable legal questions can depend on the policy and jurisdiction.
Why Reviewing the Policy Is Essential
Because the right of appraisal is contractual, the policy is the primary source of authority. The policy will specify — among other things — what triggers the right, how appraisal must be demanded, who selects the appraisers, what qualifications apply, how an umpire is selected if needed, and what effect an award has.
Attempting to invoke appraisal without first reviewing the policy can lead to procedural missteps. When the process and requirements are unclear, consulting with a qualified attorney familiar with insurance law in the applicable jurisdiction is advisable.
Educational Disclaimer
A1 Auto Appraisals is an independent vehicle appraisal company and is not a law firm. The information provided on this page is for general educational purposes only and should not be considered legal advice. Insurance policies, appraisal provisions, claim circumstances, and applicable laws vary. Questions concerning legal rights, insurance policy interpretation, or applicable law should be directed to a qualified attorney in the applicable jurisdiction.