Should I suggest ADR for a car accident insurance dispute?
So you've found yourself in a dispute with your car insurance carrier. Let's say you're far apart on how much the carrier should pay out based on an injury or vehicle damage claim you have filed. What are your options? Instead of filing a lawsuit you may want to explore alternative dispute resolution (ADR) methods like arbitration, mediation, and appraisal.
First, check the terms of your car insurance policy to see what it says about your procedural options for claim disputes -- or any kind of dispute for that matter. Usually, it will state that either party may propose an ADR procedure like arbitration, but both sides must typically agree to participate -- unless there is a "mandatory" ADR clause in your policy.
Arbitration and mediation are both forms of ADR, and may be an option depending on the language of your policy and the insurer's willingness to submit the dispute to one of these processes.
In arbitration, the parties select an arbiter (or, in some cases, each party selects one arbiter, and those two in turn agree on an arbiter who will actually hear the case). The arbitration process is less formal than court, but evidence is still presented to the arbiter, who considers each side's argument and issues a decision that may or not be binding on the parties. For binding arbitration, there is usually some avenue for appeal in place for the losing side. Learn more about Arbitration of Car Accident Claims.
Mediation is less formal than arbitration. The parties select a mediator who listens to both sides' arguments, sometimes the sides are separated and sometimes everyone is together in one room. The mediator does not make any kind of decision, but rather tries to facilitate a resolution to the dispute. One or both parties can decide to discontinue mediation at any time. Learn more about Car Accident Claim Mediation.
Finally, if you're in a dispute about the amount of money that the insurer is offering to pay on a vehicle damage claim, you may be able to invoke the "appraisal clause" of your policy, and have an independent appraiser take a look at the damage to your vehicle contrasted with its pre-accident condition, and offer an opinion as to actual cash value.