What process allows disputing claim amounts in insurance, typically involving two appraisers or an umpire?

The process that allows disputing claim amounts in insurance, typically involving two appraisers or an umpire, is arbitration. In arbitration, both parties present their case, including evidence and arguments, to a neutral third party known as an arbitrator or an umpire. This process is binding, meaning the decision made by the arbitrator is final and legally enforceable.

Arbitration is commonly used in insurance claims to resolve disagreements over the amount of a claim, especially when the policy includes an appraisal clause. Each party appoints their own appraiser, and if these appraisers cannot agree on the value, they can call in an umpire to make the final determination. This method is often preferred in the insurance industry because it tends to be quicker and less costly than litigation, while also being more formal than negotiation or mediation.

In contrast, mediation involves a mediator who facilitates discussion and negotiation between the parties but does not make a binding decision. Litigation refers to taking the dispute to court, which can be lengthy and expensive, while negotiation is a more informal process where parties try to reach a settlement on their own without third-party involvement. Understanding the distinctions between these processes is crucial for effectively navigating dispute resolution in the context of insurance claims.