The appraisal clause in Michigan auto policies
If the insurer's total loss offer is too low and talking to the adjuster hasn't moved it, most auto policies contain a provision built for exactly that: the appraisal clause. Each side hires its own appraiser. If the two can't agree on a value, they select an umpire, and agreement between any two of the three sets the amount.
It is a formal step with real costs, and it is not the right move on every claim. Policy terms vary, and yours governs — what follows describes how the process generally runs, not what your policy says.
How the process runs
- Someone demands appraisal in writing. Either side can. The clause usually specifies how and within what period.
- Each side names its own appraiser, and pays for that appraiser.
- The two appraisers try to agree on the amount of the loss. Where they agree, that's the end of it — the figure is set and no umpire is involved.
- If they can't agree, they select an umpire. Policies generally provide for a court to appoint one if the two appraisers can't agree on who it should be.
- Agreement between any two of the three sets the amount.
Step 3 is where most demands actually end. The umpire exists as a tiebreaker, not as the destination — which means the outcome turns almost entirely on the quality of the number your appraiser brings to step 2.
What it decides, and what it doesn't
It decides the amount of the loss. That is all it decides.
Not whether the loss is covered. Not who was at fault. Not how a policy term should be read. Those are separate arguments the clause doesn't reach, and an appraisal proceeding cannot resolve a coverage denial.
How binding the result is, and on what, depends on the policy wording. Read the clause in your own policy before relying on any summary of it, including this one.
Who pays
You pay your appraiser. The insurer pays theirs. Where an umpire is appointed, policies typically provide for the two sides to share that cost.
That arithmetic is the thing to work out before starting. On a claim where the gap is a few hundred dollars, the process can cost more than it recovers. On a gap of several thousand — where most disputed total losses sit — it looks different.
Harold serves as your appraiser under the clause, for the same flat$350 as the valuation report itself. That covers being appointed on your side and carrying it through: inspecting the vehicle, documenting what it was worth, corresponding with the insurer's appraiser, and agreeing an umpire if it comes to that. No separate fee for the proceeding, and no percentage of whatever the claim settles at.
When it's worth invoking, and when it isn't
Worth considering when the gap is large enough to justify the cost and the delay, you have a documented value of your own to put behind it, and the disagreement is genuinely about what the vehicle was worth.
Probably not when the gap is small, when the dispute is really about coverage rather than amount, or — most commonly — when the adjuster hasn't yet been given a documented number to respond to. Most offers that move, move at that point, before anything formal starts.
Before anything formal: a number you can defend
An appraisal clause demand without a supported valuation behind it is a process with nothing to put into it. The work is the same either way: a defensible figure for what the car was worth the moment before it was damaged — comparable sales, photographed condition, written up.
That is an independent total loss appraisal —$350, flat, no percentage of whatever the claim settles at. In documented cases it has been enough on its own:an $880 offer that settled at $3,300, among others.
In Michigan specifically
Michigan ties a total loss to the vehicle's pre-damage value under MCL 257.217c, which is why that single figure decides so much of a claim.The thresholds, and how they work.
Separately from the appraisal clause, Michigan's Department of Insurance and Financial Services (DIFS) takes complaints about how an insurer is handling a claim. That is a different route with a different purpose — it addresses conduct, not valuation — and it doesn't replace the clause.
Complaints go through DIFS's Office of Consumer Services: call the toll-free hotline at(877) 999-6442 (Monday–Friday, 8 a.m. to 5 p.m.), or file directly through DIFS's online complaint portal.
Questions people ask
- What is the appraisal clause in an auto insurance policy?
- A provision in most auto policies for when the insurer and the vehicle owner agree there has been a loss but disagree about its amount. Each side appoints its own appraiser; if the two can’t agree, they select an umpire, and agreement between any two of the three sets the amount. Terms vary between policies, so the policy itself governs.
- How do I invoke the appraisal clause?
- By demanding appraisal in writing, which either side may do. The clause in the policy sets out how that demand is made and within what period, so start by reading it. In practice it’s worth having a documented valuation in hand first, since the process is built around each side producing a supported figure.
- Who pays for the appraisal process?
- Each side pays its own appraiser. Where an umpire is appointed, policies typically provide for the two sides to share the umpire’s cost. Because those costs are real, the size of the gap between the offer and the vehicle’s actual value is what decides whether the process is worth starting.
- What does the umpire do?
- The umpire is a tiebreaker, brought in only when the two appraisers can’t agree. Agreement between any two of the three — the two appraisers, or either appraiser and the umpire — sets the amount. Most demands are resolved between the appraisers without an umpire ever being appointed.
- Does the appraisal clause apply if my claim was denied?
- No. The clause resolves disagreements about the amount of a loss, not about whether a loss is covered. A denial is a coverage dispute, which is a different argument and a different process.
- Do I need a lawyer to use the appraisal clause?
- The clause is something the policy itself provides for settling a disagreement about amount, not a lawsuit, and using it doesn’t require filing one. What it does require is a defensible valuation. Harry’s Appraisals provides the valuation and does not give legal advice.
Find out whether there's a gap
Send what the vehicle was, the VIN, and the figure the insurer put on it. Harold Bloomer will tell you whether that number is defensible — and if it is, he'll say so, and it will have cost you a phone call.