The appraisal clause: your policy’s built-in second opinion

You found the errors in the insurer’s valuation, sent proof and a counteroffer, and the adjuster still won’t move. Before you accept, look in your policy for an appraisal clause. It lets you bring in your own appraiser to settle what your car was worth, with a neutral umpire to break a tie. This guide explains how the appraisal clause works on a total loss, what it costs and when it is worth using. If you haven’t checked the offer yet, start with our guide to what to do when a total loss offer is too low.

In this guide

• What the appraisal clause is
• How the appraisal clause works: 6 steps
• What an appraisal costs
• When it is worth using
• New rules in Washington and Texas
• Common questions

What the appraisal clause is

An appraisal clause is a section of an insurance policy that sets out how you and the insurer resolve a disagreement over the amount of a covered loss. On a total loss, the disagreement is usually about actual cash value: what your car was worth right before the accident. The National Association of Insurance Commissioners (NAIC) tells consumers who disagree about the value of a claim to check their policy for an appraisal clause.

The clause covers the amount only. Texas’s new appraisal law, for example, describes it as a process “solely to determine the amount of loss when that amount is in dispute.” A dispute over whether the policy covers the accident at all, or over how the claim was handled, goes through other channels, such as a complaint to your state insurance department.

In many auto policies the clause sits in the part that covers damage to your own car, under a heading such as “Appraisal.” Wording, deadlines and cost rules differ between insurers and states, so read your own policy before you rely on anything below.

How the appraisal clause works: 6 steps

1. Read the clause in your policy

Find the full policy, not just the declarations page. Note who can demand an appraisal, whether the demand must be in writing, any deadlines, how the appraisers and the umpire are chosen, and who pays for what. If you can’t find a clause, ask the adjuster in writing whether your policy has one and for a complete copy of the policy.

2. Try to settle the value first

Appraisal works best after you have already shown the insurer what is wrong. Ask for the full valuation report, check it line by line and send the errors with proof. Our guide to reading a CCC valuation report lists eight checks, and how total loss value is calculated explains where each number comes from. If the insurer corrects the report, you may not need an appraisal at all.

3. Send a written demand

If the adjuster won’t move, email a short demand and keep it in the same thread as the rest of the claim. Name the policy section, state that you disagree with the amount, and give your appraiser’s name or say you will name one within the time the policy allows. For example:

4. Each side chooses an appraiser

You choose and pay your appraiser, and the insurer does the same. Some policies and state rules require each appraiser to be “competent and disinterested.” Washington’s law defines disinterested as having no direct financial interest in the outcome. Look for someone who values vehicles for a living, knows your local market and documents every comparable. A value backed by listings is easier for an umpire to accept.

5. The appraisers compare values, and an umpire breaks a tie

Each appraiser sets a value. If they agree, that is the amount. If they don’t, they choose an umpire and submit only the points they disagree on. In the wording Washington now requires, “an agreement of any two is binding,” and many policies use similar language.

6. The insurer pays on the appraised amount

The appraisal sets the value of the loss. The rest of the policy still applies, so your deductible comes off and a lender on the title is paid first. Ask the adjuster when the payment will be issued once the award is signed.

What an appraisal costs

In most versions of the clause, each side pays its own appraiser and the two sides split the umpire’s fee. The table shows who does what.

Role	Chosen by	Usually paid by	What they do
Your appraiser	You	You	Documents your car’s value with its trim, options, condition and local comparables
Insurer’s appraiser	The insurer	The insurer	Does the same for the insurer
Umpire	The two appraisers	Split equally	Decides only the points the appraisers can’t agree on

Some states shift part of the cost. Oregon’s Division of Financial Regulation says insurers must reimburse reasonable appraisal costs when the final appraised value is higher than the company’s last offer. Check whether your state has a similar rule. Where it doesn’t, the policy decides, and the usual wording leaves you paying your own appraiser whatever the result.

When it is worth using

The appraisal clause usually makes sense when:

• The gap between the offer and the value you can document is clearly larger than your appraiser’s fee plus half of the umpire’s.
• You have pointed out specific errors and the adjuster hasn’t corrected them.
• The disagreement is about value: comparables, condition, options or mileage.
• Your own insurer is paying the claim.

It is less useful when the gap is a few hundred dollars, when the dispute is about coverage, or when you have already signed a release. The clause is part of your own policy, so it usually doesn’t apply when the other driver’s insurer is paying. In that case an independent appraisal can still serve as evidence in your negotiation, or you can ask about filing under your own collision coverage.

If you plan to invoke the clause, you will need an appraiser on your side. You can see what a certified appraisal report includes before you decide.

Tell us about the claim and the offer. We explain the options and the fees before you commit to anything.

New rules in Washington and Texas

Two states have recently made the appraisal clause mandatory in auto policies.

In Washington, RCW 48.18.620 requires that every auto policy with first-party physical damage coverage issued or renewed on or after January 1, 2026 include an appraisal clause. The statute spells out the wording: either side makes a written demand, each side names a “competent and disinterested” appraiser within 10 days, and the appraisers have 30 calendar days to finish. If they can’t agree on an umpire within 15 days, either appraiser can ask the insurance commissioner to name one.

In Texas, Senate Bill 458, which took effect September 1, 2025, adds a chapter to the Insurance Code requiring an appraisal provision in personal auto and residential property policies delivered, issued or renewed on or after January 1, 2026. The amount set by the appraisal is binding on you and the insurer, except in cases such as fraud or a material mistake. The law leaves details such as how long an appraisal may take to rules from the Texas insurance commissioner.

Other states have their own rules, and many policies include the clause without any state requiring it. Your state insurance department can tell you what applies to your policy.

Common questions

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This article is general information, not legal advice. Total loss rules and policy terms vary by state and by insurer. Check your policy and your state insurance department for what applies to your claim.