Insurance adjusters need to understand as much about the claims process as possible. Whether you actually handle arbitration or subrogation demands usually depends on your company’s departmental protocol, but learning about the process is critical in terms of how you handle a file and put together your claim notes.
Here are a few facts that every adjuster needs to know about Arbitration Forums.
What is Arbitration Forums?
Arbitration Forums, Inc. is a not-for-profit organization that handles disputes amongst its nearly five thousand members. These members agree to have specially appointed arbitrators hear their cases in lieu of taking the dispute to a court of law.
It is the largest arbitration and subrogation provider in the United States, and serves a vast majority of large insurance carriers. It also includes major self-insured companies, such as large trucking firms and corporations. Annually, the group hears around 619,000 arbitration cases.
How Do They Find Arbitrators?
One of the great aspects of Arbitration Forums is that it utilizes employees from its member companies to create a pool of arbitrators. These can range from adjusters to claims managers, but all are required to pass a series of tests and simulations about the claims industry before they are allowed to hear cases. Insurance arbitrators are never allowed to handle disputes that include the company they work for and are expected to remain neutral throughout the process as they evaluate the facts given.
How Does the Claims Industry Use Arbitration Forums?
The claims industry heavily utilizes Arbitration Forums, as it is far less expensive than taking a case against a fellow insurer to litigation. In addition, members are not charged an annual fee, but pay per case filed. Only the company that files case is charged, not the one answering the dispute. Those that file are also expected to use one of their arbitrators to hear a separate case in the future.
For many major insurers who have thousands of cases filed each year, this number can really add up. For smaller companies or commercial firms that self-insure and may only have a half dozen disputes per year, the total case charges are, of course, much less.
Why is Recorded Statement Transcription Important When Utilizing Arbitration Forums?
Recorded statement transcription is important in having a case go through the Arbitration Process. This is because the arbitrator that reviews the file and makes a decision cannot receive audio files. He or she only has text files and notes from the claims adjusters on both sides to go by.
A verbatim transcription file adds in an extra layer in terms of proving (or disproving) a case. Those who are trying to prove liability often opt to add many different transcripts from drivers, witnesses, and other accident experts. This can be a very important tool for both the adjuster filing the dispute and the one who is answering the demand.
Is an Arbitration Forums Decision Binding?
Decisions from Arbitration Forums are not legally binding. The decisions are more or less a “gentleman’s agreement” between the two carriers that they will follow through with the recommendations put forth by the arbitrator. However, companies that don’t follow the arbitrator’s decision could lose the privilege of having future cases heard through the process. For this reason, the vast majority opt to work in favor of the final decision.
Last Minute Recorded Statement Transcription and Allegis Transcription
This last little piece is one to know in case you ever find yourself in a situation where you have an arbitration dispute or answer to file, but are running out of time to get one done. One of the reasons why so many large insurers work with Allegis Transcription is that we offer four-hour turnaround time on rush transcription orders. This allows you to get the insurance transcription you need and still have plenty of time to complete your arb file. Please contact us for further details.
In short, Arbitration Forums is a very important tool for many insurers across the country. To learn more about how the process works, check out their website at Arbfile.org.
Good article. Wish to clarify one point – the arbitration decisions rendered by the member arbitrators are legally binding onto the signatory companies. The signatories have agreed to accept the decisions as final and binding. Failure to pay an award could expose the non-paying signatory to reimbursing the court costs and fees incurred by the prevailing signatory.
Good to hear this.