With home insurance costs being higher than ever, everyone is looking for ways to save on costs. Some insurance companies are now offering a new way to save money: the arbitration agreement.
What is the Arbitration Agreement?
The arbitration agreement is an agreement between you and the insurance company where if there is a dispute regarding a claim, you will use an arbitrator to help resolve that matter. The arbitration process is used instead of costly lawsuits and multiple lawyers.
As you can imagine, both parties using lawyers to resolve issues can get quite expensive. No one wants to pay attorney fees unnecessarily, so the arbitration agreement resolves that issue by using an independent arbitrator.
How Did the Arbitration Agreement Come About?
While most insurance claims are valid, the industry is facing an unprecedented number of fraudulent claims. Many of these claimants resort to lawsuits, which further exasperate claim costs, and end up costing the insurance companies more. In response to fraudulent lawsuits, many insurance companies are now offering the Arbitration Agreement.
Why should you consider it?
In exchange for using the Arbitration Agreement, insurers are offering you a discount on your insurance premium. Just today I applied this to one of our clients and it saved them $750.00!
Another reason to consider it is that it should make your claim go more smoothly and efficiently. One concern some people have is if it takes away your right to sue the insurer if they act in bad faith. In many cases, you are not giving up your right to sue, but you are agreeing to go through the arbitration process as a first step in the dispute process.
While not every insurance company offers the arbitration agreement, we are starting to see more and more offer it. While still relatively new to the Florida insurance market, our hope is that it creates a win-win situation for Floridians.