A professional assessment of property's value on the current market (including real estate and other types of property).

In terms of insurance, you may need an appraisal in two types of situations. First, you may need an appraisal in order to determine the value of an item – particularly an expensive item, like a piece of jewelry or an antique – so that you can purchase an insurance policy with adequate coverage.

Appraisals are also used to determine the extent of damage following a covered event. Some business owners don't realize that most insurance policies come with an "appraisal clause," which gives them the right to hire an independent appraiser to assess the cost of damage in the event that you disagree with your insurer's original estimate.

When most people think of appraisals, they think of property appraisals, which are necessary if and when you decide to sell. This number can be much different than your property's assessed value and its replacement value. Generally speaking, your property's replacement value is the most important number when it comes to your Property Insurance.