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Should You Try Arbitration After Failed Negotiations With An Insurance Company?

by Theresa Hoffman

For some, filing a lawsuit after negotiations have failed with an insurance company seems like the best way to recover damages from a car accident. However, there is an alternative method of dealing with the situation. Arbitration is a viable way of solving your dispute with the insurance company and avoid court. If you are considering arbitration, here is what you need to know.

Why Should You Choose Arbitration?

One of the main reasons to use arbitration is that it will help keep your case out of court. In court, both you and the insurance company are at the mercy of the jury. Despite all the evidence you must support your claims, there is still the possibility of losing your case in court. In arbitration, you only must convince once person. The arbitrator is usually well-versed in the law and has a better understanding of the law.

Arbitration is often a chance to resolve your case quickly. It could take several months to have a trial scheduled for your case. Delays caused by motions that are filed and discovery could push it over a year. By contrast, you could likely get a resolution to your case in three to four months with an arbitrator. Some steps, such as selecting an arbitrator, can take as little as a few days, which would significantly reduce the time it takes to reach a conclusion.

Will the Insurance Company Agree to Arbitration?

The insurance company is not legally obligated to agree to arbitration. If the insurance company turns down your offer of arbitration, that is unfortunate. You cannot force the company to go, but you can remind it of the alternative.

Your attorney will likely inform the company that if arbitration is off the table, your next step is to file a lawsuit. The insurance company has the same concerns about going to court that you do. The idea of facing off in front of a potentially biased jury could drive the company to agree.

Is the Outcome Final?

Although there are several benefits to arbitration, there is a drawback. If the arbitrator decides in favor of the insurance company, you will not have any other options for pursuing compensation for the car accident damages.

The decision of the arbitrator is final. Neither you nor the insurance company can repeal it. It is important that you carefully consider this before deciding on whether arbitration is right for settling your car accident case.