Here’s the thing: you pay your insurance company every month in order to be protected. Unfortunately, they don't always have your best interest at heart when it comes to fair payouts should you have a claim. All too often, Florida insurance companies are known to take advantage of any system they can in order to save money. And in this case, insurance companies save money by paying you less for your needed property repairs.
When your insurance denies your claim or offers you a settlement that doesn't match up to the cost of repair, you may feel like you need to take legal action. Unfortunately for many people, a traditional court case is not an option.
See, more and more insurance companies are adding mandated arbitration into your policy. This means that instead of working with a lawyer to go to court with a neutral judge, you must solve your dispute through arbitration.
Ironically, this whole process sounds like it should be illegal... but in Florida, it's continuously being upheld in the law. Our insurance claim experts will break down what arbitration is, and why you should triple-check your policy to make sure your rights are being respected.
What is Arbitration?
Arbitration is a system that allows you to settle a dispute out of court. In many cases, the arbitrator is a third party that has no ties to the case and is chosen by both parties.
In theory, arbitration is supposed to be a fair system that allows the parties involved to settle the issue in a quick manner, without having to go to court.
Florida's Laws Regarding Arbitration
The Federal Arbitration Act was passed in 1925 because legislators saw arbitration as a quick, more efficient, and more equitable way to resolve disputes, as both parties could make their points of view known without having to worry about court costs.
This means that consumers who have a dispute with their insurer may not be able to take the company to court. Instead, they will have to go through arbitration, which is often seen as a less favorable process for the consumer.
Commonly, the arbitration clause may come with some premium discounts, but what are you really agreeing to? In Florida, the arbitration rules are determined by the insurance company and the judge is picked by them too. Now, you can have a lawyer (that you have to pay for though some will work on contingency, but all attorneys are different).
Recent law changes have made it very hard to sue and made bad faith next to impossible to go after companies for. You can only sue if the claim has gone to a judge and that judge determines 25%+ or more of the original claim is owed. It remains to be seen if this is for only new claims or for existing ones as they move forward in the claims process.
Compared to Litigation, Arbitration is Unfair to the Policyholder
Traditional litigation is often a much better choice for the homeowner in this situation, but if you don’t carefully read through your huge insurance policy, you may be waiving that right away. And it’s more common than you may think, especially here in Florida.
For many people, arbitration seems like a good option on the surface. Overall, it is typically a less costly and faster way to solve a dispute. While this is true, mandating consumers to go through arbitration can often leads to the benefit of the insurance companies involved.
Mandated arbitration clauses put policyholders at a massive disadvantage by limiting the timeframe of the dispute, the awards granted to the policyholder, and more.
In traditional litigation, a jury is picked by a neutral party, and background checks are done to ensure neutrality, where many insurance arbitrators available to the consumer are a part of the greater insurance industry, and will often have a bias towards the companies.
Now, your insurance doesn’t even have to pay their own attorney fees, even if you win. If under the 25+% threshold, YOU may have to pay their attorney fees on the claim. (Bear in mind: these claims lawyers often work in-house and can charge what they want.)
How to Avoid Arbitration Clauses
We don’t expect every policyholder to have thoroughly read through their contract, and even if you did, it would be full of purposefully confusing terms and loopholes. Insurance companies make the claims process and the policy language as complicated as possible for a reason – to reduce the amount of money they have to pay out to affected homeowners.
Luckily, Liberty Adjusters is here to help! We know the insurance lingo and will work to make sure any claim to your policy favors you as much as possible. There are many shady tricks insurance companies use to increase their profits, from using depreciated value or ACV when evaluating your claim to sneaking in mandatory arbitration clauses.
Alleviate Insurance Arbitration Woes with our Adjusters
Unlike your insurance company, Liberty Adjusters is on your side. We only get paid by increasing your insurance settlement and we can get up to 574% more for needed repairs. Why? Because we go to bat for property owners every day and we know policies like the back of our hand. Home and business owners don’t have that expertise – and your insurance is counting on it!
Remember: before you file your claim, call the licensed public adjusters here at Liberty Adjusters. We will fight for your claim and make sure you get the highest payout possible.
Call us today at 813-922-5129 or you can submit your claim online!