The purpose of the Insurance Claim Appraisal process is to offer both parties to the insurance contract a less expensive and alternative settlement solution then having to go to court in order to reach a settlement.

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The Appraisal Provision of most insurance policies is defined as; "If you and we fail to agree on the amount of loss, either one can demand that the amount of the loss be set by appraisal … The appraisers shall then set the amount of the loss … They shall submit their differences to the umpire … Written agreement signed by any two of these three shall set the amount of the loss."