Ace the South Carolina Personal Lines Exam 2025 – Unleash Your Insurance Superpowers!

An appraisal is needed when there is a disagreement between the insured and the insurer regarding the value of a loss. This process allows both parties to present their respective valuations to a neutral third-party appraiser, ensuring an impartial determination of the loss's worth.

To initiate the appraisal process, either party can make a written demand for an appraisal if they cannot reach an agreement on the valuation. This mechanism is essential for resolving disputes effectively, without resorting to more contentious or lengthy litigation. It promotes fairness by allowing both sides to have input and ensures that a qualified appraiser evaluates the loss impartially.

In contrast, the other options do not accurately reflect the circumstances under which an appraisal should be requested. For instance, requiring agreement from both parties before initiating an appraisal undermines its purpose, which is to resolve disputes specifically when an agreement cannot be reached. Appraisals are not simply at the insurer's discretion, nor are they limited to situations where a claim exceeds a specific dollar amount. Thus, the correct understanding of the appraisal process hinges on the existence of a disagreement and the ability for either party to initiate it with a written demand.