Intercompany Insurance Arbitration Explained
Intercompany insurance arbitration is how claims cases are resolved between insurance companies in situations that call for subrogation. Subrogation is when one insurance company files a claim against another insurance company. The idea is to avoid costly court litigation, relying on a panel of professionals to hear the case and decide how the claim can be resolved.
Explaining intercompany insurance arbitration sounds more complicated than it needs to be. The basic idea is that both companies can save money by having their cases resolved by a panel of experienced insurance adjusters. The panel investigates both sides of the claim, looks at the evidence, and then makes a decision on how much the defendant must pay to the claimant. Instead of taking the case to court where a judge and jury will make the final decision, the case is heard in a closed trial that includes appraisers who have passed rigorous testing to verify their aptitude for the business of accident appraisal.
From the perspective of the policyholders, the insurance claim has been paid and everyone has received what the insurance company agreed was just payment. Arbitration takes place behind the scenes, using a panel of unpaid, professional adjusters who decide how much the value of the damages will be. The system saves hundreds of thousands of dollars a year in drawn out legal battles, and allows car insurance claims to be settled in relatively short time, unlike what could happen in an actual courtroom.
If you are not happy with the way your case was arbitrated, you can look for a different insurance company, but keep in mind that the arbitrating committee is not employed by any given insurance company. On the other hand, getting an online car insurance quote is a good way to find lower rates, better coverage and a more appealing customer service attitude from the company that insures your car.