Adjuster Licensing Class Practice Exam 2025 - Free Adjuster License Practice Questions and Study Guide

The process referred to when an insurer and an insured have a dispute regarding the amount of the damage is known as appraisal. This method provides a structured mechanism for resolving disagreements about the value of a loss. Typically, both parties will select an appraiser, and those appraisers work together to assess the damage. If they cannot reach an agreement, they can engage an umpire to make a binding decision.

In this context, investigation would typically refer to the initial process of gathering facts and evidence regarding a claim, rather than specifically resolving a dispute over damage amounts. Mediation involves a neutral third party assisting both sides to reach a mutually agreeable solution, which is different from the more adversarial nature of appraisal. Negotiation is a broader term that can apply to various types of discussions or agreements but does not specifically focus on the formal process related to disputes over the value of damages in insurance claims. Appraisal, therefore, is the precise term used for the situation where there is a disagreement on the extent of loss, making it the correct answer.