Mediation of Coverage Disputes: Uninsured and Underinsured Motorist Insurance

Mediation of Coverage Disputes: Uninsured and Underinsured Motorist Insurance

Mediation is a form of alternative dispute resolution that can be used by an insurance company and an insured to settle a dispute between themselves regarding uninsured or underinsured motorist coverage as well as other disputes. The alternative to mediation would be a lawsuit. In mediation, a third person, who has experience with insurance disputes, meets with the insurance company and the insured to try to work out a solution on which both parties can agree.

Generally, mediation is a voluntary process. The cost of mediation can be divided between the parties as they agree. However, if a lawsuit has already been filed, the court may order the parties to mediate the dispute. Some courts make mediation a part of their scheduling order. Other courts may send a case to mediation once the parties have completed formal discovery.

If the mediation results in a settlement between the parties that deals with all of their issues, then the matter can be closed and any litigation based on the matter can be dismissed. If mediation did not result in a settlement, the parties could still go to arbitration. Arbitration is another form of alternative dispute resolution. Many insurance policies contain a clause requiring the arbitration of issues between the insurance company and the insured. Unlike mediation, an arbitration decision is binding on the parties.

When invited, insurance companies that may be liable for uninsured and underinsured motorist coverage in a given case can join the mediation of a dispute between an insured and an insurance company of the person who caused the insured's loss. During the mediation, the interests of the uninsured or underinsured insurance company could be represented. It would also help to settle all claims at one time.

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