How to Invoke the Appraisal Clause: Step-by-Step Demand Letter & Process
Invoking the appraisal clause is the single highest-leverage move available to a policyholder disputing a total loss offer. It's a contractual right written into nearly every U.S. auto policy, the carrier is required to honor it, and the result is binding on the dollar amount. This guide walks the exact steps to invoke it, the demand-letter language carriers accept, and what to expect from start to binding decision.
What the appraisal clause does
The appraisal clause is a standard provision in U.S. auto policies that lets either side — the policyholder or the carrier — formally dispute the amount of loss in a total loss or repair claim. Once invoked:
- You name an independent appraiser
- The carrier names its appraiser
- The two appraisers attempt to agree on the value
- If they disagree, they jointly select a neutral umpire
- Any two of the three (your appraiser, carrier's appraiser, or umpire) signing the same number makes that number binding
The appraisal clause settles the dollar amount only — not coverage, liability, or fault. Those are separate disputes.
When to invoke it
Invoke the appraisal clause when:
- Your written negotiation has stalled
- The carrier's offer is $1,000+ below local market
- You have an independent appraisal supporting a higher number
- The claim is open and you haven't signed a release
Do NOT invoke when:
- The dispute is about coverage or liability (use a complaint to your state DOI instead)
- The gap is under $500 (the appraisal fees usually aren't worth it)
- You've already signed the release
Step-by-step
1. Find the appraisal clause in your policy. It's usually in the "Conditions" or "Settlement of Loss" section. Typical language: "If we and you do not agree on the amount of loss, either party may demand that the amount of loss be determined by appraisal..."
2. Hire an independent appraiser BEFORE you invoke. You need a named appraiser ready to act when you send the demand. Most carriers ask for the appraiser's name and contact info in their response.
3. Send a written demand letter. Sample language:
"Pursuant to the Appraisal provision of policy [POLICY #], claim [CLAIM #], I hereby demand appraisal of the amount of loss for the [YEAR/MAKE/MODEL/VIN]. I have appointed [APPRAISER NAME, LICENSE #, CONTACT] as my appraiser. Please provide the name and contact information for your appraiser within [STATE-REQUIRED DAYS, typically 20] days so the appraisers may proceed and, if necessary, select an umpire."
Send by email AND certified mail. CC the claims supervisor.
4. The two appraisers work the file. They exchange comp data, photos, condition notes. They may agree directly — most cases settle here.
5. If they disagree, they pick an umpire. If the appraisers can't agree on an umpire, either party can petition a court to appoint one (rare). The umpire reviews both appraisals and issues a decision.
6. Two-of-three signatures = binding award. The written award is binding on the amount of loss. The carrier pays. The claim closes.
Timeline
- Demand sent to first response: 5–10 business days
- Carrier appraiser appointed: 10–20 days
- Appraisers exchange data and attempt agreement: 20–45 days
- Umpire selection if needed: 10–20 days
- Umpire decision: 14–30 days
Total: 30–90 days, with most cases settling around day 30–45 without an umpire.
What the carrier can and cannot do
Can:
- Demand the appraiser be "competent and disinterested" (no body shop owner, no salvage buyer with a stake)
- Refuse to pay appraisal fees beyond their own appraiser (you pay yours; umpire fees are typically split)
- Negotiate up to or after the demand to avoid the process
Cannot:
- Refuse to honor the appraisal clause (it's contractual)
- Punish you, raise your premium, or non-renew because you invoked it
- Force you to accept their appraiser's opinion outside the process
What it costs
- Your appraiser: typically $199–$500 flat fee
- Carrier's appraiser: paid by carrier
- Umpire: typically $500–$1,500, split 50/50
AutoACV's appraisal clause representation is flat-fee, no contingency — the appraisal cost is $199 and umpire fees are split per policy.