Georgia Property & Casualty Practice Exam

What provision in a commercial inland marine policy may help resolve disagreements over loss payment between the Cook Law Firm and its insurance adjuster?

1. Loss payment

2. Appraisal

3. Other insurance

4. Control of property

The correct answer is: Appraisal

The appraisal provision in a commercial inland marine policy is specifically designed to address disputes that may arise concerning the amount of loss or damage. When there are disagreements between the insured party and the insurer, particularly in terms of the value of a loss or the extent of damages, this provision allows both parties to engage in an appraisal process. In this process, each party selects an appraiser, and these appraisers work together to determine the amount of the loss. If they cannot reach an agreement, they may then select an independent umpire to help make the final decision. This mechanism provides a structured and impartial way to resolve disputes, ensuring that both parties have a say in how losses are evaluated and compensated. The inclusion of an appraisal provision in the policy helps facilitate a more efficient resolution to disagreements, potentially reducing the need for lengthy litigation and enabling the Cook Law Firm to receive a fair settlement in a more timely manner. This feature of the insurance policy is crucial in maintaining the balance of interests between policyholders and insurers, ultimately leading to a smoother claims process.