The Umpire Clause is an important part of the insurance contract. It is used to settle disputes between the insurance company and the insured when a disagreement arises.

In a typical Umpire Clause, the insurance company and the insured each hires an independent appraiser. Both appraisers then work with the Umpire, normally an experienced and well-qualified attorney, to resolve the dispute. The appraisers can accept an appraisal from either party or reject both appraisals and make a determination of their own. In order to reach a resolution, only two of the three members of the panel need to agree.

This clause represents a compromise between the insurance company and the insured. For example, if the insured feels that the insurance company is offering an inadequate settlement and the insurance company feels that it is offering a fair settlement, then they can meet in the middle and agree on a resolution. It is also a way to manage costs associated with disputes as going to court can be costly and time consuming.

The Umpire Clause is most often used in cases involving property damage or other losses. The appraisers may conduct an inspection of the property in question or consider the evidence presented to them by both parties. They must make an unbiased determination that decides who should bear the responsibility for the loss or damage.

In any case involving the Umpire Clause, both parties must provide unbiased and professional appraisals. The appraisals must be based on a comprehensive evaluation of the evidence and should include complete documentation and explanations. This ensures an accurate and impartial assessment of the damages.

The Umpire Clause is a valuable tool that is often used in insurance disputes. It is an effective means of resolving disputes without the need to involve the courts. Both the insurance company and the insured are well served by this clause, as it facilitates a fair and balanced settlement that is beneficial to both parties.