Massachusetts Court Discusses Whether an Insurance Company’s Demand for Arbitration was Untimely and Waived

A major aspect of any car accident is dealing with insurance companies. There are many different policy provisions and protocols that you may need to review to ensure that you are making your claim appropriately and that you receive the coverage that you deserve. Even if you are doing your best to follow all of the proper steps, insurance companies usually don’t have your best interest in mind. This means that they will try to do whatever they can to avoid paying you the coverage that you deserve. The dedicated Boston car accident lawyers at the Law Offices of Michael O. Smith are prepared to help you assert your rights to the fullest extent.

A recent case discussed the application of an underinsured motorist policy and the arbitration provision included in the insured’s policy. The plaintiff suffered injuries in a car accident and eventually obtained a settlement for the amount of that driver’s policy limits. The plaintiff’s insurance company was not a party to that settlement but provided consent to it.

The plaintiff then sought underinsured motorist coverage from her insurance company, which invoked the arbitration provision in the plaintiff’s policy. Arbitration is a form of dispute resolution in which the parties agree to let a neutral arbitrator resolve the matter. The outcome of an arbitration is binding on the parties in the same way that a court judgment is binding.

The plaintiff and her insurance company each filed motions for summary judgment and the court concluded that the insurer’s invocation of arbitration was untimely and that it had waived its right to arbitration. It also concluded that as a result of the settlement that the plaintiff had obtained from the driver, the insurer was collaterally estopped from contesting issues of liability and damages associated with the underinsured motorist claim. The insurer appealed.

The reviewing court reversed, finding that despite the significant amount of time that had passed between the insurer’s demand for arbitration, the insurer did not violate its policy-based and statutory right to seek an arbitration. First, it noted that the insurer never expressly waived its right to arbitration and that it was reasonable for the parties to wait until the resolution of the plaintiff’s legal dispute with the driver. The appellate court also stated that it was not a waste of judicial resources and time for the insurer to wait on the resolution of the plaintiff’s claim against the driver because the insurer was not a party to that action. As soon as the plaintiff entered into a settlement with the driver, the insurer demanded arbitration.

If you were involved in a car accident and have questions about your right to compensation or how to deal with insurance companies, we are waiting to assist you. We understand how confusing the court system and insurance policies can be, particularly if you are also injured and dealing with the stress of the accident. Our seasoned team of Boston car accident lawyers offers a free consultation to discuss your situation and how we might be able to help you. Call us now at 617-263-0060 or contact us online.

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