Terry Tycoon purchased a $5 million insurance policy to cover an original Van Gogh painting. Smoke from an accidental grease fire in Terry's kitchen damages the painting's surface. Although art restoration experts say the painting can be cleaned, the chemicals in the greasy soot have noticeably changed the tint of the pigments in the paint. As a result, the painting is no longer as valuable as it was before the fire. The insurer and Terry cannot agree as to the amount of the loss that is payable under the policy. The insurer invokes a policy provision requiring Terry to submit to an appraisal. The insurer's expert appraiser thinks the painting has only lost $600,000 in value. Terry's expert appraiser, on the other hand, thinks the painting has lost $2.3 million in value. Under most policies, what are the procedural steps to resolve the dispute between the appraisers
a. Most policies state that any uncertainty in the appraisal amounts must be consd in favor of the insured. Therefore, the insurer must pay $2.3 million in accordance with Terry's expert's appraisal.
b. Most policies state that a dispute between appraisers will be submitted to an umpire for final resolution. The insurer will be required to pay whatever amount on which two of these three parties (the two appraisers and the umpire) can agree.
c. Most policies state that the insurer's appraiser has the power to override the insured's appraiser. Therefore, the insurer need only pay the $600,000 in accordance with its own expert's appraisal.
d. Most policies do not state any procedural steps for resolving a dispute between appraisers. Therefore, the parties have no choice but to resolve the dispute in court.