If the Insured (PO) disagrees on the Insurer’s estimated amount of the loss, they can make a written demand for an appraisal of the covered loss. An "Appraisal" is an alternative dispute resolution that's less tedious and less expensive as compared to a Litigation or Settlement.

Once the Appraisal clause/provision is invoked, a panel is created that's made up of three participants. The insurance company and the insured will have their own Insurance Claim Appraiser to represent them in the process. Both appraisers will agree to an unbiased Umpire before the process on investigation starts.

Both Appraisers will estimate the damage and try to come to an agreement on the amount of loss. If the Appraisers fail to agree, the Umpire will make a final ruling on the differences in the amount of the loss between the two Appraisers.

Once final, an Appraisal Award is issued. This document has a break down of what the final cost of loss decided by both Appraiser and the Umpire.