What is the difference between an insurance mediation and an insurance arbitration?

In California, insurance mediation and insurance arbitration both provide methods of dispute resolution involving insurance-related matters. However, there are important differences between the two approaches. Insurance mediation is a process in which an impartial third party (known as a mediator) helps the parties involved in a dispute to negotiate an agreement in an effort to settle their differences. The mediator does not make any rulings, but instead facilitates a conversation between the parties that aims to reach an amicable solution. The ultimate goal is voluntary agreement and the process is entirely confidential. Insurance arbitration is different in that an arbitrator, who is also an impartial third party, hears both sides of the dispute and makes a binding decision based on the evidence presented. The arbitrator’s decision is a legal judgment that can be enforced in court. During the process, the parties can exchange information and dispute facts, but there will be no negotiations. When compared to litigation, both insurance mediation and insurance arbitration are often much faster and less expensive. However, because of the binding nature of arbitration, it is generally viewed as a more serious form of dispute resolution than mediation. As such, it is advisable to seek legal advice before engaging in either process.

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What is the difference between an insurance mediation and an insurance arbitration?

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