Investopedia explains 'Umpire Clause'
For example, let's say Sheldon has a car accident and his car is totaled. He is at fault, so he files a first-party claim with his own insurance company. The insurer determines that the value of his totaled vehicle is $10,000 and offers to pay him the $10,000 minus his $1,000 collision deductible. According to his research, Sheldon believes the value of his car to be closer to $15,000. Since they are so far apart, Sheldon and his insurer agree to invoke the policy's umpire clause and have a neutral third party and appraisers determine the value of the car.
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