Oklahoma Insurance Adjuster's License Practice Test

In the context of insurance claims, "appraisal" refers to a specific method utilized to resolve disputes regarding the value of a claim, typically involving a third-party appraiser. This process is initiated when the insurer and the policyholder cannot agree on the amount of loss or damage that has occurred.

During an appraisal, each party usually selects their own appraiser, and these appraisers work together to determine the fair market value of the loss. If they reach an agreement, that amount will be used to settle the claim. If they cannot agree, they may appoint an umpire to make a final decision, which both parties must accept. This process is specifically designed to expedite resolution and avoid prolonged legal disputes.

In contrast, a review of insurance policies pertains more to understanding the terms and conditions rather than valuing a specific claim. An initial assessment conducted by the insurer often occurs prior to any disputes over value and is part of the claims handling process, but does not encompass the detailed and formal dispute resolution that an appraisal entails. Lastly, while there may be legal aspects to some claims, appraisal as defined here is not a legal process but rather an alternative dispute resolution method.