These important provisions typically are found in the “Conditions” section of a policy’s “Loss Settlement” portion of such policies. In general, if the respective appraisers hired by the property owner and the insurer cannot agree on the amount of a covered loss, they are required to choose a “competent, impartial umpire.” If they are unable to do so, the court that would have jurisdiction over the matter will choose one.
Thereafter, after review of all submissions sent to him, and possibly his own inspection of the damaged property, the umpire will derive a loss amount. If either one of the appraisers agrees with this amount in writing, then the amount becomes binding on the parties. This informal methodology is infinitely more streamlined and cost-efficient than resorting to a lawsuit.