What is 'appraisal' in the context of insurance claims?

In the context of insurance claims, 'appraisal' refers to a process used to resolve disputes over the amount of loss between the insurer and the insured. This process typically comes into play when there is a disagreement about the value of the property damaged or the amount necessary to settle a claim.

During an appraisal, each party usually selects their own appraiser, and those appraisers work to determine the fair value of the loss. If the two appraisers cannot agree, an umpire may be appointed to make a final decision. This process is integral to the claims management procedure, ensuring that both the insurer and the insured have a fair opportunity to present their evaluations and reach a resolution.

The other options do not accurately capture the essence of what an appraisal entails in the insurance context. For example, assessing customer satisfaction is a different aspect of customer service management, while calculating potential future losses pertains to risk assessment and not the resolution of current claim disputes. Finally, the notion of insurers increasing their payouts during disputes misrepresents the purpose of appraisal, which is to arrive at a fair assessment rather than an arbitrary increase in payments.