What is the Best Way to Handle an Insurance Coverage Dispute?

Florence J. Tipton

An insurance coverage dispute is usually handled by gathering all of the facts and documentation that support the claim. Generally, the type of dispute related to the claim will determine how the insurance coverage dispute is handled. Most insurance policies will have a section that outlines how disputes are resolved. Having a clear interpretation of this process can direct a person on the best way to proceed. An insurance coverage dispute might be resolved through a mediation process or with the help of an attorney.

Disputes might arise over responsibility for an accident or coverage.
Disputes might arise over responsibility for an accident or coverage.

The types of insurance coverage disputes may involve areas as divers as health, automobile, or homeowners insurance claims and will determine how a dispute is handled. Some insurance policies might include exclusions which can limit or disallow restitution for damages sought in a claim. In general, insurance regulations may require insurance companies to have a procedure for an insurance coverage dispute when a claim is denied.

A mediation program might help resolve an insurance coverage dispute.
A mediation program might help resolve an insurance coverage dispute.

A health insurance dispute is usually governed by the procedures in the medical policy that may include an in-house process of handling a complaint. If the insurance policy dispute is related to an automobile accident, the claim might be resolved through arbitration. Arbitration provides a legally binding settlement that is less expensive than hiring an attorney. When a homeowner disputes the decision of the insurance company for home repairs after a natural or man-made disaster, the insured may need to include the insurance agent.

For some disputed claims, insurance companies require the insured to agree to a mediation process before filing a legal claim in civil court. Insurance dispute mediation is generally held with the insured, the insurance company, and a third-party negotiator who does not have an invested interest in the outcome of the decision.

A mediator might be employed by a private firm or part of a mediation program with the local agency that regulates insurance practices. Mediation is an opportunity to settle the insurance coverage dispute without a court battle. Both sides have an opportunity to present details to support either denying or honoring the insurance claim. The end goal is to seek a fair resolution between the insurance company and the insured. The agreement in a mediation process is considered non-binding, which means that either party has the option to refuse the recommended settlement.

If the insured person is unable to reach an amicable agreement with the insurance company during mediation, it might be necessary to hire an attorney to represent the insured. An experienced attorney is expected to negotiate with the insurance company and hopefully get a better settlement for the insured. Hiring an attorney is usually more expensive than trying to resolve the dispute without legal counsel.

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