When is arbitration commonly used in insurance disputes?

Arbitration is commonly used in insurance disputes, particularly in cases involving Uninsured Motorist (UM) and Underinsured Motorist (UIM) claims. These situations often arise when an insured individual is involved in an accident where the other party either does not have insurance or has insufficient coverage to pay for the damages. Disputes in these contexts frequently involve difficult questions about the amount of damages and fault, which can lead to disagreements between the insured and the insurance company.

Arbitration serves as an alternative dispute resolution mechanism that allows both parties to present their case before an impartial third party, making it a useful solution for these specific types of disputes. This process can be more expedient and less costly than traditional litigation, which is why it is favored in UM and UIM cases where they aim to resolve conflicts efficiently while ensuring that all parties have a fair chance to present their arguments.

In the context of the other options, while theft claims, property damage disputes, and premium adjustment disagreements can also involve conflict resolution, these situations do not typically rely on arbitration to the same extent as UM and UIM disputes. Rather, these may follow standard negotiation or legal processes, depending on the specifics of the case.