How to manage insurance disputes?


Claiming the insurance money from an insurance company is as such a very dreary task. This becomes further difficult if the concerned insurance company does not act in favor of the customer and does not respond to claims. Settling disputes with insurance companies can be done in many ways without legal filing a legal case involving lots of procedure.

Appraisal process:

This process comes in handy when the customer and the insurance company does not agree upon the amount claimed and amount that can be released. Under such circumstances, both the insurance company and the customer can choose a representative each, known as the appraiser. Appraisers review the claim and the amount that the insurance company can release and determine if the settlement is justified. Then the appraisers both the parties discuss the settlement and come to a common consensus. If both the parties agree to the settlement amount, then the case is settled without much hassles and long procedures involved. 

Third Party:

When the appraisers chosen by each party do not reach an understanding and agree upon the settlement amount, then a third party can be involved known as the ‘umpire’. The job of the umpire is to hear the demands of each appraiser and decide a settlement amount agreeable to both the parties. 

Arbitration Process:

Sometimes, the settlement amount decided by the umpire may not be agreeable to both parties. In such cases, the process is carried on to the next level known as the arbitration process. In this process, two arbitrators are chosen by each party, in order to help them arrive at an understanding. While the umpire in appraisal process cannot impose legal binding on both parties, the umpire in arbitration process has that power. If two arbitrators representing both parties do not reach an agreement, then an umpire is chosen who decides upon a settlement and imposes it upon the insurance company legally. Arbitration process holds more value since it happens in the presence of a judge. Since it is a formal proceeding, arbitrators must be paid by parties who hire them, and the umpire must be paid by both parties equally. 

Although most cases are settled well before arbitration process, some difficult cases need further legal action. Customers can file for a full fledged legal case against insurance companies who fail to pay the settlement ruled by the arbitration process. Although the case may favor the customers, care must be taken in reading the hidden conditions and clauses that the insurance company may have included in the offer, before filing a case.