Mataracy
VIP Contributor
Though this condition or principle will be dealt with under claims dispute, as an important condition in every policy of insurance, it is expedient to discuss it briefly here.
Dispute often arise between the insured and the insurer on the amount payable for a loss. This dispute does not normally result from claim repudiation but purely on amount of claim offered by the insurer. It has therefore becomes a doctrine to insert in every policy of property insurance to contain arbitration condition.
This condition precludes or prevents the insured from taking a claim dispute to court but to first exhaust the arbitration condition.
Insurer prefer arbitration to the law courts because of the following:
(a) Proceedings are conducted in private hence personal or confidential matters do not become the subject of newspaper comment as is the case in court cases.
(b) It is less expensive
(c) Proceedings are less formal.
(d) proceedings are more speedy and free from adjournments as the case in court
(e) Negative publicity which may affect patronage is avoided.
Dispute often arise between the insured and the insurer on the amount payable for a loss. This dispute does not normally result from claim repudiation but purely on amount of claim offered by the insurer. It has therefore becomes a doctrine to insert in every policy of property insurance to contain arbitration condition.
This condition precludes or prevents the insured from taking a claim dispute to court but to first exhaust the arbitration condition.
Insurer prefer arbitration to the law courts because of the following:
(a) Proceedings are conducted in private hence personal or confidential matters do not become the subject of newspaper comment as is the case in court cases.
(b) It is less expensive
(c) Proceedings are less formal.
(d) proceedings are more speedy and free from adjournments as the case in court
(e) Negative publicity which may affect patronage is avoided.