Arbitration
Arbitration is a private dispute-resolution process in which a neutral arbitrator or panel decides the outcome of a claim under rules set by contract or by statute.
Collision Bureau is not a law firm and this is not legal or medical advice. It is general information about what happens after a crash. For advice on your situation, talk to an attorney licensed in your state or a treating clinician.
What it means
Arbitration is a private process in which a neutral third party, called an arbitrator, hears both sides of a dispute and issues a decision that resolves it. In crash claims, arbitration shows up in two main places: as an uninsured and underinsured motorist dispute mechanism inside the policyholder's own auto policy, and as an inter-insurer process that handles subrogation claims between carriers. The underlying idea is the same in both: a decision by a neutral under agreed-upon rules, outside court.
How the process works in general terms
The structure runs in a familiar order. The parties agree on, or draw from a defined panel of, one or more arbitrators. The two sides exchange a limited set of documents and sometimes conduct a limited deposition or two. A hearing happens, often in person but increasingly on video, with each side presenting evidence and argument. The arbitrator issues a written award, usually within a defined period after the hearing closes. The award is enforceable like a judgment under the rules that govern the specific arbitration.
Where it comes up after a crash
Uninsured and underinsured motorist arbitration is the version most crash claimants encounter. If the policyholder and their own insurer cannot agree on how much the policyholder is entitled to recover under those coverages, the policy itself often directs the dispute to arbitration. Inter-insurer arbitration appears when two carriers disagree about who owes what in a subrogation claim. Beyond those, some claims land in arbitration because a vehicle purchase, rental, or ride-share contract required it before the crash ever happened.
What it is not
Arbitration is not the same as mediation, which is a voluntary, non-binding negotiation guided by a neutral. It is not a court process, so the rules of evidence and procedure are generally lighter, discovery is more limited, and the right to appeal is narrower than it is after a trial. It is not the same as the appraisal clause either, which handles the dollar amount of a covered loss rather than a legal dispute. Where a specific crash claim will go, and in what form, is a question for an attorney in your state.
Questions people actually ask
01How is arbitration different from a lawsuit?
A lawsuit runs in a public court under general rules of civil procedure and ends in a judgment. Arbitration runs in a private forum under the rules the parties agreed to or that a statute supplies, and ends in an award by one or more neutrals rather than a jury. Arbitration is generally faster and less formal, with limited discovery and limited appeal rights. The right process for a specific claim is a question for an attorney licensed in your state.
02Is arbitration the same as mediation?
No. Mediation is a facilitated negotiation in which a neutral helps the two sides reach a voluntary agreement, and the mediator does not decide anything. Arbitration is adjudicative: the neutral hears the evidence and issues a decision that resolves the dispute. The two processes often appear in the same claim at different stages, and a contract or statute may require one, the other, or both. For specifics on a particular claim, an attorney is the right source.
03Is the arbitrator's decision final?
In most forms, yes, within tight limits. The appeal rights after an arbitration award are narrower than the appeal rights after a court judgment, and the stated grounds for setting an award aside are typically limited to things like fraud, bias of the arbitrator, or an award that exceeds the scope of what the parties submitted. The finality rules that apply to a specific award are set by the governing contract and statute, which an attorney can walk through.