What process is used to settle disputes between an insurer and an insured?

The process used to settle disputes between an insurer and an insured is typically arbitration. Arbitration is a formal method of resolving disputes outside of the courtroom where an independent third party, known as an arbitrator, makes a binding decision regarding the conflict. This process is often stipulated in insurance contracts, making it a common and preferred choice due to its efficiency and the reduced costs compared to litigation.

In the insurance context, arbitration can streamline the resolution process, allowing both parties to present their case without the delays and formalities often associated with court trials. This method is particularly valuable in the insurance industry, where disputes can arise over claims, coverage interpretations, and other issues, enabling faster resolutions and providing clarity to both parties involved.

While mediation involves a facilitator helping both sides reach a mutually agreeable solution, it does not result in a binding decision. Litigation refers to the formal court process and can be lengthy and expensive. Negotiation is an informal process that may not always result in a resolution or a binding agreement. Therefore, arbitration stands out as the preferred method for resolving disputes in this context.