What Is the Arbitration Process Like for Car Accidents?

Last Updated on December 28, 2025

After some auto accidents, settlement negotiations hit a wall—especially if you believe the carrier is undervaluing your damages. If you’ve reviewed the numbers and feel the settlement offer is still too low, arbitration can be a practical way to resolve the dispute without going to court.

Arbitration isn’t right for every claim, and the rules vary by state and policy type. But when both sides are willing (or your policy requires it for certain disputes), arbitration can be a faster, more structured path to a decision.

Key Takeaways

• Auto insurance arbitration is a private dispute process where a neutral arbitrator decides a claim disagreement without a courtroom trial.
• Arbitration can be binding or non-binding—always confirm in writing because binding awards are usually very difficult to challenge.
• The strongest arbitration cases are well-documented, with clear proof of liability, damages, and a paper trail of repairs, medical bills, and wage loss.
• A high-low agreement can cap risk by setting a minimum and maximum payout range before the arbitration hearing.

What Is Auto Insurance Arbitration?

Arbitration is a private dispute-resolution process where a neutral decision-maker (the arbitrator) reviews evidence and arguments from you (or your attorney) and a representative for your auto insurance provider. Instead of a judge or jury, the arbitrator decides the outcome.

In car accident cases, arbitration is most commonly used to resolve disagreements about responsibility (liability), the value of injuries and property damage, or certain benefits that may be governed by policy language. In some situations—especially uninsured/underinsured motorist disputes—your policy may include an arbitration clause.

When Arbitration Makes Sense

Arbitration is often worth considering when:

• You’ve tried to reach a fair deal through negotiation, but the numbers never get close.
• The main fight is about the value of damages (medical costs, lost wages, pain and suffering, vehicle value).
• Liability is disputed (including cases where both parties share fault).
• You want a decision without the time and expense of full-scale litigation.
• You live in a no-fault auto insurance state and your dispute involves benefits that may have specific procedures or thresholds before you can sue.

Arbitration isn’t always the best option for complicated claims that require extensive discovery, expert testimony, or a broad appeal strategy. If your case is high-dollar or legally complex, it’s smart to talk with an attorney before committing to any arbitration agreement.

Binding vs. Non-Binding Arbitration

Before you proceed, confirm whether the arbitration will be binding or non-binding:

• Binding arbitration means the decision is generally final. Challenging it in court is usually limited to rare circumstances (like serious procedural unfairness), so you should assume the result will stand.
• Non-binding arbitration means either side can reject the decision and continue the dispute (often by filing or continuing a lawsuit).

Ask the adjuster (and review your policy) to confirm the rules in writing. Don’t rely on verbal descriptions of what is “final” or “appealable.”

How to Request Arbitration

If you’re unhappy with the direction of your settlement talks, start by reviewing your policy for any arbitration or appraisal language and then move to a written request. In many disputes, a clear written demand is what gets the process moving.

Your request should be specific and organized:

• Claim number and accident date
• A brief summary of what happened
• What you believe is in dispute (liability, medical damages, vehicle value, etc.)
• The amount you’re seeking (or your proposed valuation range)
• A list of supporting documents you’re providing (or will provide)

If the carrier refuses arbitration (or your policy doesn’t allow it for this dispute), your next step may be to discuss litigation with counsel—especially if you have a strong claim and the gap between offers is significant.

How to Prepare for Arbitration

Arbitration rewards preparation. The goal is to make it easy for the arbitrator to understand what happened, what it cost you, and why the insurer’s position doesn’t match the evidence.

Build a clean “case file” that includes:

• Police report and any citations
• Photos/video of the scene and damage
• Vehicle repair estimates (or total-loss valuation documents)
• Medical records and itemized bills
• Proof of missed work and wage loss
• Witness statements, if available

If you haven’t already, follow the proper way to file an insurance claim after an accident so your documentation trail is complete. Also, review how insurers typically evaluate and verify claims so you’re ready for the weak points they may highlight during the hearing (see: do car insurance companies investigate claims?).

Finally, consider whether you should hire representation. For higher-stakes claims, disputed fault, or serious injuries, it may be time to consult counsel about when to hire an auto insurance lawyer.

What Happens at the Arbitration Hearing?

Most hearings are structured but less formal than court. Typically, both sides present opening remarks, share documents, and explain their position. Witnesses may appear, but many arbitrations rely heavily on records (photos, estimates, medical bills, and written statements).

Expect the insurer to challenge the parts of your case that affect payout—fault, medical necessity, treatment timelines, vehicle value, or coverage details. If your carrier is arguing you’re not entitled to payment (or is limiting payment), review common reasons insurers use to push back (see: how and why insurers deny claims).

How Long Does Arbitration Take?

Timelines vary widely based on scheduling, document exchange, and the complexity of the dispute. Some cases wrap in a few months, while others take longer—especially if multiple experts are involved or calendars are tight.

In general, arbitration is often faster than a traditional lawsuit because it can reduce motion practice and streamline evidence. Your arbitrator (or arbitration organization) will usually set deadlines for exchanging documents and a hearing date.

Arbitration Awards and Payment

After the hearing, the arbitrator issues a written decision (“award”). Depending on the rules, the award may explain the reasoning in detail or provide a shorter decision with the final numbers.

If the arbitration is binding, the award usually becomes the roadmap for payment and closing the dispute. If it’s non-binding, either side may reject it and move to the next stage (often litigation).

High-Low Agreements in Arbitration

Sometimes the insurer and claimant agree to a high-low agreement before the hearing. This sets a minimum payout (the “low”) and a maximum payout (the “high”) to limit risk on both sides. It can be useful when both parties want closure but disagree on the final value.

In many high-low setups, the arbitrator is not told the bracket numbers so the decision stays neutral. After the award is issued, the amount is adjusted (if needed) to fit within the agreed range.

FAQs on Auto Insurance Arbitration After a Car Accident