What does 'appraisal' refer to in the context of insurance?

In the context of insurance, an 'appraisal' primarily refers to a process that is used when there is a disagreement on the amount of the loss. This process typically occurs when the insured party and the insurance company cannot come to an agreement on the value of the loss or damage that has occurred.

During an appraisal, each party usually selects an appraiser who is responsible for evaluating the extent of the loss. These appraisers then work together to try to reach a consensus on the amount of the loss. If they are unable to agree, a neutral third-party umpire may be brought in to make the final determination. This process ensures that both the insurer and the insured have a fair opportunity to present their assessments, thereby helping to resolve disputes efficiently.

The other options, while relevant to other aspects of insurance, do not align directly with the established definition of 'appraisal' in the context of insurance. For instance, calculating a premium involves assessing risk and underwriting, determining coverage limits relates to policy provisions, and requirements for renewals pertain to the continuation of coverage rather than a resolution of loss disputes.