What is an appraisal in the context of insurance?

In the context of insurance, an appraisal is regarded primarily as an estimate of the current value of the property. This assessment is critical because it helps both the insurer and the insured to determine how much coverage is necessary and appropriate. When a policy is written, the appraised value can influence the premiums, coverage limits, and the overall insurance plan.

While there are other contexts in which appraisals may be applied, such as damages after a claim or methods to settle disputes, these are not the defining characteristics of what an appraisal is in this particular insurance framework. An appraisal focuses on the property’s worth at a specific time, providing an essential foundation for various insurance transactions, coverage explanations, and underwriting processes.