Most Indiana drivers have never heard of the appraisal clause in their auto insurance policy. Most adjusters certainly aren't going to bring it up. But when there's a dispute over a total loss settlement, it may be the most powerful tool available to you — and it's built directly into your contract.
What the Appraisal Clause Does
The appraisal clause is a formal dispute resolution mechanism that allows either party — you or the insurer — to demand an independent appraisal when there's disagreement over the value of a total loss vehicle. Here's the process:
- Both sides hire their own qualified, independent appraiser
- The two appraisers attempt to reach an agreed value
- If they can't agree, they jointly select a neutral umpire
- A decision agreed to by any two of the three parties is binding
When to Invoke It
The appraisal clause is most useful when the insurer's ACV offer is significantly below what comparable vehicles are actually selling for in your market, when you've submitted your own comparables and the insurer won't move, or when you've exhausted normal negotiation without resolution.
How to Invoke It
Written notice to the insurer is required — stating that you're invoking the appraisal clause. The exact language and notice requirements vary by policy, so read your declarations page carefully before sending anything. Timeliness matters; many policies have deadlines for invoking the clause.
What It Costs — and What You Get
Each party pays for their own appraiser. Umpire costs, if needed, are typically split. Even accounting for those fees, the appraisal process regularly produces net recoveries well above the insurer's initial offer — often by several thousand dollars. The process also moves faster than litigation and doesn't require an attorney.
The appraisal clause is not your only option — it exists alongside the right to file a complaint with the Indiana Department of Insurance or pursue litigation. In some cases, all three avenues are worth considering. If you're facing a total loss settlement that doesn't add up, don't accept it on the grounds that you have no choice. In Indiana, you have more leverage than most people realize.