What options do you have when your homeowner’s insurance provider denies your claim or another dispute arises? “Lawsuit” might be the first word that comes to mind, but homeowners actually have several options that don’t involve litigation. One of these options is mediation, which is an informal process that involves a neutral third party who assists in resolving the dispute.
The Florida Department of Financial Services offers mediation services for car owners, business owners and homeowners. An experienced attorney can help you reach out to DFS to determine if their mediation services are right for you.
Understanding the Mediation Process
While mediation is not legally binding, it is an effective way for policyholders to resolve disputes with their insurance company, particularly if both sides act in good faith. Here is what you need to know about the mediation process:
- The DFS certifies neutral third parties to act as mediators when the policyholder sits down face-to-face with an insurance company representative.
- The mediator doesn’t issue a “ruling” or make a final decision; rather, the mediator encourages the parties to come to an agreement themselves.
- The person representing the insurer must have full authority to make an agreement that completely resolves the claim. If the representative does not have this authority then the insurer is deemed to have failed to appear.
- Because the outcome of mediation is not binding, neither the policyholder nor the insurance company is legally obligated to abide by it. If the parties reach a settlement agreement at the mediation conference they have three days to rescind it, unless a check has been cashed.
Note that the policyholder can bring an attorney to the conference but he or she must notify the insurer beforehand. The insurance company is responsible for covering the costs of the mediation conference.
Who Is Eligible for Mediation?
Either the policyholder or the insurer may request mediation over disputed residential property claims exceeding $500. That includes claim denials. (Flood claims are not eligible.) However, claims are not eligible if a fraud complaint has been filed or the policyholder and insurer already agreed what caused the loss and that the policy does not cover it.
If a homeowner elect’s mediation, then the insurance company can no longer force the homeowner to an appraisal – which is binding and typically not in the best interest of the homeowner.
Other ADR Options: Appraisals and Arbitration
Most homeowner insurance policies include an appraisal provision, which is an alternative dispute resolution process that resolves specific issues regarding the amount of loss. In other words, appraisal will determine how much you should be compensated for your damaged piano, rare books or other property. That being said, appraisal is not the different from other types of ADR, since it is limited to a specific loss.
Arbitration is the process of bringing a dispute before a disinterested third party, or arbitrator. Both sides present evidence and the arbitrator makes a decision, which is often binding. This might sound similar to litigation, but there are several differences. For example, arbitration is a private process and litigation is public; arbitration has a more limited evidence process; arbitration is less expensive than litigation; and the litigation process is more time-consuming.
Reach Out to Us Today for Assistance
Homeowners have multiple options when it comes to resolving disputes with their insurance providers. The Florida attorneys at the Insurance Litigation Group can guide you through the insurance claims process and help you understand your dispute resolution options, including mediation, arbitration, appraisal and litigation and will guide you towards the best option to help you receive the compensation that you are entitled to under your homeowner’s insurance policy. Contact us today for a free consultation.
Resource:
leg.state.fl.us/statutes/index.cfm?App_mode=Display_Statute&Search_String=&URL=0600-0699/0627/Sections/0627.7015.html
