Who are the three parties involved in the "appraisal clause"?

The appraisal clause is a standard provision found in many insurance policies, allowing for a method of resolving disputes between the insurer and the insured regarding the amount of a loss. It typically involves three parties: two appraisers and an umpire.

In this process, each party appoints an appraiser. These appraisers are responsible for assessing the loss and determining what the compensation will be. If the two appraisers cannot agree on the valuation, the umpire steps in to resolve the disagreement. The decision made by the umpire, together with the appraisers' findings, helps finalize the claim amount. This arrangement provides a fair system for both the insurer and the insured, ensuring that both parties have a voice in the assessment of the loss while also having a neutral third party to help mediate if necessary.

This structure is crucial because it streamlines the claims process, preventing prolonged disputes and providing a clear mechanism for resolution.