Under a standard fire policy, what occurs if the insured and the insurer cannot agree on the amount of loss?

Under a standard fire policy, if the insured and the insurer cannot agree on the amount of loss, the correct process is for each party to select an appraiser. This method is part of the appraisal clause typically found in fire insurance policies.

When a disagreement arises regarding the valuation of a claim, each party appoints their own appraiser who evaluates the loss. The two appraisers then work together to come to an agreement on the amount of loss. If they cannot agree, they can often call in an umpire, a neutral third party, to help resolve the disagreement. This structured process allows for an impartial assessment and can help expedite the resolution of claims without resorting to court or other lengthy dispute resolution methods.

Choosing appraisers facilitates a more specialized and nuanced approach to assessing damages, while also minimizing potential conflicts that might arise in a more adversarial setting, such as litigation.