State Farm Arbitration Process

State Farm Arbitration Process 

If you suffer injuries in a car accident, you expect the insurance company to cover your medical costs, lost wages, and pain and suffering. However, settlement negotiations often fail. State Farm arbitration may be a smart choice to resolve your car accident case. 

Arbitration is a type of alternative dispute resolution (ADR). A neutral party is selected to hear both sides of the case and render a decision. 

Arbitration may occur in a disputed car accident claim. State Farm claims rules require arbitration to settle first-party claim disputes, which are disputes with your insurance provider. 

Below is more information about the arbitration process with State Farm and sample State Farm car accident settlements. 

State Farm Arbitration Clauses

A State Farm auto insurance policy is a contract between you and the insurance company. Arbitration is faster than a lawsuit, so many insurance policies mandate arbitration before a case can go to court.

There are two types of arbitration: 

  • Binding: The decision of the arbitrator is binding with no appeal. 
  • Non-binding: Both parties may accept the decision or reject it and file suit. 

State Farm required binding arbitration in its auto insurance policies. The is a mandatory arbitration clause if you file a car accident claim on your own State Farm policy. 

You usually file first-party auto insurance claims under: 

  • Personal Injury Protection (PIP) coverage
  • Medical payment coverage
  • Underinsured or uninsured driver coverage
  • Collision coverage

If your car accident settlement negotiations hit a wall, State Farm may require you to enter arbitration. 

State Farm Arbitration Clause

Your insurance policy should have a section called ‘alternative dispute resolution.’ Your policy should have a statement that reads something like the following: 

“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 be settled between the parties must be submitted to binding arbitration as part of the alternative dispute resolution process.”

You cannot sue your auto insurance company when it has a binding arbitration clause. If you cannot settle with State Farm, you can either walk away with nothing or submit your arbitration claim. 

The State Farm adjuster may try to talk you out of going to arbitration. They could increase their offer. If you decide on arbitration, it indicates the adjuster failed to do their job. A case that goes to arbitration costs State Farm more money. 

State Farm Arbitration for 3rd-Party Claims

When you file a State Farm car accident claim with the other driver’s policy, this is a 3rd-party claim. Insurance companies cannot order 3rd-party claimants to file arbitration. You can file a lawsuit immediately if settlement negotiations fail. 

However, arbitration can be a better choice than filing a lawsuit. Talk to a personal injury attorney in a free consultation to determine if you are better off going to arbitration or filing suit. 

Why Choose State Farm Arbitration? 

Here are the financial advantages: 

  • Arbitration costs less than a lawsuit. 
  • Arbitration lacks monetary limits found in small claims court.
  • Pain and suffering can be included in compensation.

Here are the procedural advantages: 

  • Arbitration can be set up faster than a court date. 
  • You play a role in choosing the arbitrator. 
  • Rules of evidence in arbitration are less stringent than in court. 
  • If you obtain compensation, you receive payment quickly. 

If you handle your claim without a lawyer and go to arbitration, the hearing is less intimidating than going to court with no legal representation. 

What Happens During the State Farm Arbitration Process

You can bring your attorney to arbitration if you like. It would be a smart idea if you suffered severe car accident injuries. 

However, if your injuries are minor, an attorney may not be necessary. The insurance company will have an attorney, but they do not have a significant advantage in arbitration. The arbitrator will decide the dispute based on the facts, not on complicated legal maneuvers. 

If you are ready to present your case with strong evidence, you should be on equal ground with the insurance company’s lawyer. Arbitrators often try to be exceptionally fair to the claimant who is not represented by an attorney. 

Arbitration hearings are informal but tend to follow this framework: 

  • Opening statement: Introduce yourself, provide a description of the car accident claim, and say what your goal is during the arbitration. 
  • Case presentations: Present your evidence to the arbitrator and make your case. Show proof of your damages. If you are in dispute with the other driver’s insurance provider, you must prove negligence by the at-fault driver. 
  • Closing statements: After you and the insurance company have presented your arguments, you end the session by summarizing your case’s strengths. You also tell the arbitrator why you should receive compensation. 

You and the insurance company receive notification in writing of the decision. This usually happens in one or two weeks. 

State Farm usually has binding arbitration. So if you do not like the decision, there is nothing you can do. 

If you plan to go to State Farm arbitration, it is smart to have your case reviewed by an experienced attorney. Most attorneys will not charge you for a case review, so you have nothing to lose. 

State Farm Car Accident Settlement Basics

Before your case goes to arbitration, State Farm will try to settle your claim. 

Most car accident victims want to know what the average State Farm auto accident settlement is. Most State Farm claims settle for less than $15,000. 

The reason is that most auto accidents involve minor injuries. The biggest driver of a settlement’s size is injury severity. 

But there is more. State Farm usually sells insurance policy with smaller limits. While the company does offer bodily injury protection as high as $500,000, most policies have much less coverage. Typical bodily injury coverage limits for State Farm range from $15,000 to $25,000. 

When Does State Farm Offer a Pain and Suffering Settlement? 

The company requires proof of medical bills to make a State Farm pain and suffering offer. Sometimes the company will have $500 or $750 for pain and suffering without evidence of medical bills. If they offer you that amount, they will probably agree to pay six months of reasonable and necessary expenses. 

But be wary of taking that offer. You do not know if your injuries will get worse. What if you need surgery? If so, your medical costs and pain and suffering will skyrocket. And you have already released State Farm of further liability by taking their initial offer. 

Sample State Farm Car Accident Settlements 

If settlement negotiations or arbitration cannot resolve your case, it is time to file a lawsuit. 

Below are examples of real State Farm car accident settlements from across the United States. These examples may give you a glimpse of a possible settlement amount for your injuries. But your case could be worth more or less. Find a car accident attorney using the Lawsuit Info Center search tool for more information about your potential claim. 

$10,000 State Farm Back Pain and Eye Gash Settlement

A driver stopped in the emergency lane on I-95. A driver slammed into the back of his car. State Farm insured the at-fault driver. 

The man’s injuries included back pain and a large cut on his left eyelid. He received treatment at an eye center and two hospitals. 

State Farm paid the bodily injury limits of $10,000. But the driver of the car that hit him had no insurance. Unfortunately, the injured driver did not carry underinsured coverage, which limited his settlement to $10,000. 

Underinsured and uninsured coverage costs only an extra $10 or so per month. It can be critical coverage in many car accidents. 

$33,000 State Farm Broken Lower Leg Settlement

A car hit a middle-aged man’s bike in Miami. He broke his lower leg – specifically a tibial plateau fracture. His physician said the fracture healed perfectly, and no more treatment was needed. 

State Farm insured the vehicle that hit the biker. Personal Injury Protection (PIP) paid $10,000 to the man’s doctors for his medical costs. The other driver’s State Farm coverage paid the rest of the settlement. 

$125,000 State Farm Broken Wrist Settlement

A car hit another car from the side. The passenger in the second car suffered an open distal radius and distal ulnar fracture. This is an open fracture of the wrist. She also had lacerations to tendons in her fingers. A doctor performed surgery on the woman’s hand. 

Police ticketed the other driver for failure to yield. The liable driver had minimal bodily injury protection. State Farm insured the at-fault driver, and also the injured passenger, who had uninsured driver coverage. 

State Farm offered $80,000 on the injured party’s coverage. But the attorney refused to settle for anything less than the policy limits – $135,000. Why? The woman needed surgery, which always increases the value of a case. 

$100,000 State Farm Herniated Disc Settlement

A driver in Florida hit the accident victim from behind. He did not go to the hospital. After the accident, he complained of back and neck pain to his doctor. 

His brother told him to talk to a car accident attorney. After a few days, the back and neck pain got better, so he did not file a lawsuit. 

However, the lower back pain recurred a few months later. An MRI revealed a herniated disc in his lumbar spine (L5-S1). He needed a hemilaminectomy, medial facetectomy, and microdiscectomy. These are microsurgery operations. 

He needed anesthesia for the surgery. State Farm was the insurer for the liable driver with $100,000 in bodily injury coverage. They offer a policy limit of $100,000. 

$57,000 State Farm Bulging Disc Settlement

A man from New York traveled to Florida. A car hit his vehicle from behind in Miami. The liable driver received a ticket for not maintaining a proper distance. The man said the accident aggravated a previous injury – a bulging disc in the lower back. 

A physician gave him steroid injections in the lumbar part of his back. The doctor said he might need a lumbar laminectomy. He elected not to have surgery. 

State Farm insured the other driver. They settled the case for $10,000. Travelers insured the injured man’s vehicle with uninsured driver coverage. The insurance company paid $47,000 in a settlement for a total of $57,000. 

Get Legal Help With the State Farm Arbitration Process

If you are going into State Farm arbitration, having an experienced attorney at your side can help you win the case. 

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. If you are working with another insurance company, see our pages on the USAA Arbitration Process or the Progressive Arbitration process

Frequently Asked Questions about car accident settlements

If you win the case, State Farm will issue a settlement check within 14 days.

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One disadvantage is there is no formal evidence process. This means you must rely on the experience and skill of the arbitrator to understand the evidence.

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You demonstrate the extent of your property and personal damages and why the insurance company owes you compensation. The insurance company responds, and the arbitrator makes a ruling that is binding for both parties.

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There are five significant steps in the arbitration process: Initial pleadings, arbitrator selection, scheduling, discovery, trial preparation, and final hearing.

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