Question

32. According to the appraisal condition of a homeowners policy, what procedure may be followed if the insurer and insured do not agree as to the size of a loss?

(Choose from the following options)
1. Each side selects its own appraiser, and the appraisers select an umpire to settle any differences between the appraisers.
2. The insured is required to accept what the insurer is willing to pay.
3. The parties must pursue a lawsuit.
4. The policyholder is allowed to hire an appraiser, and the insurer will pay the amount etermined.

Answer 1

In case of disagreement on the size of a loss, the appraisal condition of a homeowners policy allows for each side to select their own appraiser, and the appraisers select an umpire. The policyholder can also hire an appraiser, and the insurer will pay the determined amount.

Step-by-step explanation:

According to the appraisal condition of a homeowners policy, if the insurer and insured do not agree on the size of a loss, the procedure that may be followed is as follows:

1. Each side selects its own appraiser, and the appraisers select an umpire to settle any differences between the appraisers.
2. The policyholder is allowed to hire an appraiser, and the insurer will pay the amount determined.

These steps ensure a fair resolution for both parties involved.