Lawsuit Info Center / Arbitration Process After a Car Accident
Arbitration Process After a Car Accident
What Is The Arbitration Process After a Car Accident?
You had a car accident, and you just received the auto insurance company’s final settlement offer. It is much lower than what you wanted. You believe your accident claim is worth much more. What do you do?
Most auto insurance companies allow the resolution of car accident claims through the arbitration process. Arbitration is an informal legal proceeding where both sides present evidence about the claim to a neutral person. This person is the arbitrator. Arbitration can be an effective way to resolve settlement disputes. Most arbitration awards are legally binding, and there is no appeal.
Insurance companies usually require arbitration before an accident claim can proceed to court. Arbitration is useful when settlement negotiations break down. It is beneficial because it is less expensive and time-consuming than a lawsuit. Insurance companies want to avoid extra legal expenses as much as you do.
Learn more about the car accident arbitration process below. If you have questions, find a personal injury attorney using the attorney finder at Lawsuit Info Center.
The Arbitration Clause
Most auto insurance policies have a section called Alternative Dispute Resolution. You might see language such as this:
“Any controversy or claim arising out of, or in any way relating to this insurance contract between the insured and the insurance company, which cannot settle between the parties must be submitted to binding arbitration as part of the alternative dispute resolution process.”
You cannot sue your insurance company if it has a binding arbitration clause. When you bought the policy, you agreed to the terms of their contract.
If you cannot settle your accident claim and your insurance policy has an accident clause, you can:
- Give up settlement negotiations and get nothing.
- Tell the claims adjuster you want to go to binding arbitration.
Your adjuster may try to talk you out of the arbitration and could bump up their settlement offer.
Why Choose Arbitration?
Arbitration can be a good idea for resolving an insurance claim dispute. The advantages are:
- Arbitration costs less than going to court. You will have lower legal fees and more settlement money in your pocket if you go to arbitration, most likely.
- There are no monetary limits in arbitration as in small claims court.
- You can get pain and suffering compensation in arbitration.
- You can set up your arbitration hearing faster than a court date. If you are waiting for money to pay your medical bills and lost wages, this is a big deal.
- You can have a voice in who the arbitrator is. You do not control who the judge or jury will be in court.
- Arbitration evidence rules are more relaxed than in a lawsuit.
- If you obtain compensation, you will probably receive it faster than after a lawsuit.
As noted earlier, the court can schedule an arbitration hearing quicker than a trial. While every car accident claim has varying circumstances, below is the typical car accident arbitration schedule:
- Days 1-15: Filing and starting the arbitration process
- Days 16-45: Choosing the arbitrator
- Days 46-75: Exchange of case information and case preparation
- Day 76: Arbitration hearing
- Days 77-85: Arbitration decision and award
When your settlement negotiations fail, tell your insurance claims adjuster that you want to go to arbitration. When you tell them this, the adjuster may try to up their settlement offer. Going to arbitration indicates the adjuster did not do their job. Plus, arbitration costs the company more.
You cannot coerce the insurance company to go to arbitration. However, if they refuse, the next step is to file the personal injury lawsuit. Threatening a lawsuit only works if you have a strong claim, so emphasize the most substantial evidence in your case when writing a request for arbitration.
Choosing The Arbitrator
After you ask for arbitration, you will receive a confirmation letter. Some auto insurance companies use an arbitration company to find arbitrators in your city. Or, they may ask local attorneys for their recommendations.
Most arbitrators are attorneys certified to do arbitration hearings.
You will probably have to pay half of the arbitrator’s fee with the other half paid by the insurance company. Depending on the complexity of the case, costs might be thousands of dollars. Some arbitrators want a down payment before the hearing starts. Others do not ask for a fee in advance and receive compensation at the end.
If there is involvement of an arbitration organization, you will receive a letter that confirms the proposed arbitration hearing. It also will list the contact information of arbitrators in your area. Most arbitrators are attorneys, although state laws generally do not require it.
The insurance company will receive the same letter and a list of possible arbitrators. You and the insurance company will choose one or names from that list and tell the organization of your choices. Next, they will check for the names both sides chose.
If both sides chose the same arbitrator, he or she would arbitrate the hearing. If both sides choose more than one arbitrator, then another choice will need to come from a smaller list.
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Researching the Arbitrator
Before you choose your arbitrator, it is wise to conduct some research. Check arbitrators’ websites, especially if they are lawyers. What kind of law do they practice?
You may not want to select an arbitrator who focuses on defending insurance companies! However, you do want an experienced arbitrator who is familiar with personal injury claims. A possible choice for you is an active or retired personal injury lawyer.
If the arbitrator is not an attorney, you could have a more challenging time getting their background information. But there is nothing wrong with giving the arbitrator a call. Ask about their legal experience in similar cases. Also, ask for references and other information to aid your decision.
Arbitration Hearing Location
After selecting the arbitrator, the court sets up the arbitration hearing. You will get a letter telling you when and where the arbitration will take place. Most hearings are at the arbitrator’s office, but they also may happen at a local courthouse or a hotel meeting room.
If you do not like the hearing’s time or place, talk to the arbitrator, not the auto insurance company. Ask if they can reschedule it.
Preparing For The Arbitration Hearing
The first thing to do is to choose an arbitrator to hear the case. Arbitrators are usually retired judges or attorneys. Once you select the arbitrator, he or she is the judge and jury on the matter. It is vital to research each arbitrator candidate selects one with a strong reputation for integrity and fairness.
The insurance company’s policy or state laws may dictate how many arbitrators they are and how to choose them, but you will have a final selection voice.
The Arbitration Hearing – What To Expect
Auto insurance arbitration hearings usually happen with both sides in the same room so that the arbitrator can hear a full discussion of the claim. The typical arbitration hearing lasts two or three hours. This should provide you enough time to explain the accident, your damages, and why the auto insurance company should pay the sum you request.
On the date of your hearing, you should be ready to do the following:
- Make your opening statement
- Call witnesses and cross-examine them
- Show evidence that supports your claim and damages
- Be ready to handle opposing questions about your injuries and the damages you allege
- Make a closing statement
Arbitration is similar to a court trial, but without all the legal procedures. You may feel some stress about the hearing. However, remember that arbitrators know you are not an attorney and usually give considerable leeway in these proceedings. You will be on equal footing legally with the insurance company’s attorney.
Just prepare your arbitration case well in advance and go into the room as relaxed as possible. Also, you can have an attorney with you if you choose. This could be a smart move if you have severe injuries and extensive property damage.
The Arbitration Award
Within one or two weeks after the arbitration hearing, the arbitrator will send a written statement providing a short explanation of his decision. The award is binding for both parties and neither can appeal.
Get Legal Help With Your Arbitration Case
If you plan to go into arbitration with your insurance company, hiring a skilled attorney with you could improve your chances of getting fair compensation. Lawsuit Info Center can help you find an experienced personal injury attorney in your area. Use our site to find a licensed attorney near you today to help with the arbitration process after a car accident.
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First, arbitration is faster than going to court. Second, your legal fees will be much less; you may not even need an attorney for arbitration unless you choose to have one.
You cannot appeal a binding arbitration decision. The main reason one goes into the arbitration in the first place is because the two parties couldn’t agree on a fair auto accident settlement in the first place.
However, you could challenge an arbitration award in court IF the award is related to the arbitrator’s corruption, fraud, or misconduct. This would be a difficult and expensive thing to prove however. You would definitely need to hire an attorney, and possibly a private investigators. Arbitors are typically former judges, and are usually not going to risk their careers over helping one side over another in a car accident arbitration. As a result finding any sort of fraud or corruption on the part of an arbitor will be very difficult.
The best thing to do if you’ve been injured in an auto accident is try to come to terms on a fair out of court settlement for your auto accident injuries. If that won’t work and the claim does end up in arbitration, it’s best to assume that the arbitors’ decision will be final.
The standard practice in an auto accident arbitration is for each side to pay half of the arbitration fee. Some arbitrators will accept a down payment upfront and the balance at the end of the hearing, others will require payment in full ahead of the arbitration hearing. In any event, it’ll almost always be a lot less expensive than litigating a car accident lawsuit in court. The cheaper option would be to settle our of court with the at fault driver’s insurance company, but that requires good faith negotiation by both sides, and assumes that the insurance company will make you a fair car accident settlement offer… neither of which are promised when dealing with an auto insurance company.
One disadvantage is there is no formal evidence process in arbitration. This means you must rely on your arbitrator’s experience and skill to look through the evidence and render a decision. However, if you did your homework and research on the arbitrator, he or she is an experienced attorney or judge and should be capable of judging the evidence fairly.
Arbitration is a type of Alternative Dispute Resolution. It is a hearing where both parties in a dispute agree to abide by an arbitrator’s ruling. This is another way to obtain compensation from an insurance company without going to court.
By doing this, you never have to actually go to court or file your car accident lawsuit in front of a judge or jury, which makes it a lot more affordable and less time consuming.
What is an arbitor?
The term ‘Arbitor’ is not a legal term used in the US legal system. However, if you are involved in a car accident settlement, you might hear this word used by experts or witnesses to describe someone who investigates the facts of the case or who makes recommendations about how to settle it.
Difference between an arbitrator and a mediator
A mediator does not make a binding decision but an arbitrator does. The parties involved in arbitration can either agree to accept the arbitrator’s ruling or reject it and go to trial.
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