An insurance company may require a car appraisal to determine the value of a car for insurance purposes, such as to determine the amount of coverage needed or to set premiums.

Settling an insurance claim: If you file an insurance claim due to damage to your car, an appraisal may be needed to determine the value of the car before and after the damage. This can help the insurance company determine how much to pay out on the claim.

Insuring a classic or exotic car: Specialty car insurance companies may require a professional appraisal to determine the value of a classic or exotic car, as these types of cars may be worth more than a typical car. Overall, a car appraisal can be a useful tool in the insurance process, helping to determine the value of a car for coverage and claim purposes.