Alternative Dispute Resolution (ADR) is a process that allows homeowners and their insurance companies to resolve disputes outside of the traditional courtroom setting. These alternative resolutions include Meditation, Appraisal, and Litigation.
One of the main benefits of ADR is that it can be a faster and less costly option for resolving disputes compared to going to court. Additionally, it often allows for more flexibility and control over the outcome for both parties.
In this blog, we’ll be diving deeper into the specifics of ADR and the different methods available, as well as the pros and cons of each. We’ll also discuss how a public adjuster can assist homeowners in navigating the ADR process and ensuring that their rights and interests are protected.
Mediation
Mediation is an ADR process in which an impartial third party, known as a mediator, helps two or more parties in a dispute to reach a mutually agreed upon resolution. In the context of property insurance claims, mediation may be used to resolve disputes between the policyholder (the person making a claim) and the insurance company. It is a confidential and voluntary process in which a neutral third party, known as a mediator, facilitates a conversation between your PA and the insurance company to reach a mutually acceptable resolution.
Mediations result in an agreed settlement about 50% of the time.
Why Mediation?
The goal of mediation is to reach a settlement that is acceptable to all parties without the need for further legal action. The mediator’s role is to facilitate communication between the parties and help them identify areas of agreement and disagreement. They may also provide information and guidance to help the parties understand their rights and obligations under the insurance policy.
Is there a cost?
Mediation is a free service that is offered to policyholders as a means of resolving disputes and reaching a settlement with their insurance company.
How long does it take?
On average, mediations are scheduled 21-45 days after the application is submitted. However, this can vary on a case-by-case basis.
Where does it take place?
Mediations have mostly been conducted virtually over the last few years. This means that instead of meeting in person at an office or library, the mediation is conducted over a video conferencing platform such as Zoom or Skype. This allows all parties involved to participate from the comfort and safety of their own homes, without having to travel. However, it is important to note that if a virtual mediation is not possible or preferred, it can still take place in an office or library not more than 15 miles from your residence.
What happens if we can’t reach an agreement in mediation?
It’s important to understand that mediation is a voluntary process, so if a resolution cannot be reached, it doesn’t necessarily mean that the dispute will go unresolved. One option is to continue with the mediation process and schedule additional sessions, giving both parties more time to work towards a compromise. Another option is to head into an appraisal or litigation.
Will I be able to appeal the mediation decision if I disagree with it?
Some insurance policies may provide for an appeals process if you disagree with the outcome of a mediation, while others may not. In some cases, you may have the right to take legal action if you are not satisfied with the decision reached in mediation.
Appraisal
Appraisal is an ADR process that is binding and will result in your claim being settled. We will hire an appraiser to represent you during the appraisal process if you choose to move forward. The appraiser will negotiate your claim during the process. This is binding and final, there are no further negotiations after appraisal. If an agreement cannot be made, then the Appraisers will more forward with an Umpire who is responsible for finalizing the settlement.
Why Appraisal?
An Appraisal is often used as a means of resolving disputes over the value of property or damage that are covered by an insurance policy. This may be necessary if there is a disagreement between the policyholder and the insurance company over the value of a damaged or destroyed item.
What is an umpire?
An umpire is a neutral third party appointed by both appraisers involved in an insurance coverage dispute to evaluate and make a final decision regarding the dispute. The umpire is responsible for reviewing all relevant documentation, including the policy language, claim documentation, and any expert reports or testimony presented by the parties.
Is there a cost?
The cost of an appraisal for insurance disputes can vary depending on the state and the specific circumstances of the case. Some factors that can affect the cost include the type of damage being appraised, the complexity of the dispute, and the qualifications of the appraiser.
How long does it take?
An Appraisal will take 30-90 days based on the complexity of the case and the size of the home.
Can I choose my own appraiser?
It depends on the specific terms of the dispute and the agreement or contract in place. In some cases, both parties may agree to choose their own Appraiser and present their findings to a neutral third party for a final decision.
Can I appeal the Appraisal decision?
Yes, it is possible to appeal the appraisal decision when settling a property damage dispute. If you disagree with the appraisal decision, you can request a re-appraisal or file a dispute with your insurance company.
Litigation
Litigation is the last ADR process used mainly for denied claims. This happens when a public adjuster or another third-party insurance adjuster cannot settle the claim. Litigation is available in all states; however, the cost varies by state, and attorneys will not accept all claims for continuation.
Why litigation?
This typically occurs when the public adjuster and the insurance company are unable to come to a satisfactory agreement on the amount of compensation for a claim. Your public adjuster may feel that the insurance company’s offer is not fair or adequate and therefore chooses to take the matter to court to seek a more favorable outcome.
Is there a cost?
Going to litigation can be a costly process. The case will be heard by a judge or a jury, who will decide based on the evidence presented. Costs are different per state, but usually, attorneys work on contingency, and fees can be upwards of around 30% of the settlement.
How long does it take?
Generally, the process begins with the filing of a complaint, which outlines the specific details of the damage and the parties involved. The defendant then has a certain amount of time, typically 30 days, to respond to the complaint.
The trial itself can take several weeks or even months, depending on the complexity of the case and the number of witnesses that need to be called. After the trial, the judge will issue a ruling, and if either party is unhappy with the ruling, they have the right to appeal the decision.
Will my insurance company respond negatively?
Generally speaking, insurance companies do not want to be involved in litigation and will often try to resolve disputes outside of court. For the most part, an insurance company will only respond negatively if the parameters of the litigation do not hold weight.
For example, an insurance company would respond negatively if the policyholder makes a claim not covered under their policy.
What are the potential outcomes of the litigation?
If the policyholder wins the case, they will receive a settlement that is deemed fair by the court. However, if they lose the case, they will not receive any additional compensation. You will not be able to appeal the decision if you disagree with it.
Are you feeling overwhelmed by the insurance claim process? Look no further than Bulldog Adjusters. Our team of expert adjusters will guide you every step of the way, ensuring that you receive the compensation you deserve.
Whether you need help navigating the paperwork or need to go to Appraisal, we are here to support you. With Bulldog Adjusters, you can rest easy knowing that your claim is in good hands. Don’t let the stress of an insurance claim consume you – let us be your advocate.
Contact Bulldog Adjusters today for a stress-free claims experience.
