Arbitration is an alternative to a court procedure, but is typically equally as binding. Many contracts, including insurance policies, often contain a requirement for arbitration; car accident claims therefore may sometimes have to be settled by arbitration.
Arbitration
Arbitration typically happens when you settle a car accident claim with your insurance company. For example, if you are recovering your damages from your own insurance company because you were at fault for the accident or because you were hit by an uninsured driver, arbitration may be used if you and your insurance company cannot agree. The arbitrator can listen to the evidence presented and can determine how much you should reasonably recover for your car accident claim. Both you and the insurance company can present evidence. Whatever the arbitrator decides will be binding on both of you.
Arbitration also occurs between insurers when fault is at issue. For example, assume you have an accident and you believe the other driver was at fault. That other driver blames you. Neither of your injuries are serious enough that you want to sue and let the court decide the case. You would each submit your claim to your own insurance company, and the two insurance companies would then collect evidence to determine fault. Evidence may include police reports, witness statements, testimony from you and the other driver, pictures of the car or accident scene and anything else necessary to help them figure out what happened.
Sometimes, after the two insurance companies investigate, they disagree on who is responsible. In those cases, the two insurance companies usually send the case to arbitration. An arbitrator will decide who was at fault and you will then be notified and your recovery for your damages will then come either from your insurer or the other insurer, depending on who was at fault. In such cases, you usually don't even have to go to the arbitration.
Benefits and Detriments
The major benefit of arbitration is that it is usually cheaper and faster than going to court. The downside is you don't have a chance to tell your story in front of a jury. In addition, although the law requires arbitrators be impartial- and will hear appeals if there were procedural problems in the arbitration- some believe that arbitrators are (on a conscious or subconscious level) partial to the repeat customer... which is the insurance company, who arbitrates all the time, and not to you.
Getting Help
An experienced car accident attorney can explain your rights in arbitration as well as the arbitration procedures if you are going to have an arbitration car accident claim.
