An insured and her insurer cannot agree on the amount of a fire loss, and one of them makes a written demand for appraisal. Under the appraisal clause of California's standard form fire policy (§2071), what happens next?

Explanation

The appraisal clause set out in §2071 provides that if the insured and the insurer fail to agree as to the actual cash value or the amount of loss, then on the written request of either, each shall select a competent and disinterested appraiser and notify the other of the appraiser selected within 20 days of the request. The two appraisers then choose an umpire, and an award agreed to by any two of the three sets the amount. (a) is wrong because the parties choose their own appraisers — the Commissioner has no role in it; (b) is wrong because the clause exists precisely so a valuation dispute need not start in court; and (d) is wrong because appraisal is the insured's remedy against being held to the insurer's figure.