What is the insurance appraisal clause?

The appraisal clause is a dispute resolution mechanism in most HO-3 policies. When homeowner and carrier disagree on loss value, each party selects a competent appraiser; the two appraisers select an umpire; the umpire breaks disagreements with binding effect. Avoids litigation for scope-dollar disputes. Per ISO HO 00 03 Section I Conditions.