An appraisal is a professional assessment of an item’s value.

A man uses a smartphone to take pictures of a home during an insurance appraisal

What is an appraisal?

An appraisal is a professional assessment of a property’s value. Real estate can be appraised, but so can any other type of property. In the insurance industry, appraisals are used to calculate the cost of replacing the property.

Types of appraisals 

There are several different types of appraisals, which vary based on the object being appraised and the reason the appraisal is being done. Here are some of the most common types of appraisals you should be familiar with:

Home appraisal 

The first type of appraisal – and the one you’re probably most familiar with – is a home appraisal. This is a standard part of a home-buying or -financing process, as it is required by most lenders in order to get a mortgage. Home appraisals are also helpful in determining the replacement cost of a home when buying insurance, so you know how much protection you need.

Jewelry appraisal 

Another common type of appraisal is a jewelry appraisal. This is typically done when buying or selling jewelry – particularly expensive pieces that may require special insurance coverage separate from what is typically included as part of a homeowner's policy.

When is an appraisal necessary for insurance?

Homeowners commonly get appraisals in two instances:

  1. When you purchase a home.

  2. When you purchase home insurance that also covers jewelry.

When you purchase home insurance, an appraisal helps you determine the value of your home and its contents so you can:

You may also want to have your personal property appraised if you have valuable items like expensive jewelry or antiques. Those items may mean you need scheduled personal property coverage. Scheduling property gives them more protection without drastically increasing your premium.

How does the appraisal process work?

How the appraisal process works depends on the type of appraisal you’re looking at. For a home appraisal, you typically hire a professional to inspect your home and evaluate it on a number of factors.

Some features a home appraisal might consider include your home’s:

  • Age

  • Square footage

  • Lot size

  • Number of bedrooms and baths

  • Location

  • View

  • General condition

  • Improvements or renovations

  • Contents

The appraiser then compares your home to similar homes in the area and uses this information to determine your home’s value.

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