Texas Drivers: Beware of this Auto Insurance Clause

Insurance groups are pushing the Texas Department of Insurance (TDI) to approve policies with pre-dispute arbitration agreements. Pre-dispute arbitration agreements rely on the use of arbitrators to resolve disputes as opposed to courts. In courts, consumers have the right to a trial by jury, and the dispute is resolved based on Texas laws.For example, let’s say you were to have a dispute with your insurance company but have a pre-dispute arbitration clause in your auto insurance policy. According to the executive director of the Office of Public Insurance Counsel, any disputes you have with your insurance company would go before an arbitrator selected by your insurance company. The outcome of the arbitration would be completely private, and there would be no appeals process if you disagreed with the decision. In addition, the normal rules and procedures in regard to evidence found in courtrooms may not be followed!As of right now, TDI is considering a policy that would allow such contracts to exist within our state (they have historically not allowed pre-dispute arbitration agreements). You might be thinking to yourself, “I would never sign up for such a policy!”, but the fact is, most people don’t realize when they are signing away their rights. Policyholders would be offered discounts for signing policies with pre-dispute arbitration agreements and the fact that the policy contains such a provision might not be disclosed.Sound familiar? We have discussed how insurance companies entice policyholders with lower rates, but then strip away underinsured/uninsured motorist and personal injury protection coverage. Insurance companies are lowering your rates by removing very important protections normally afforded to policyholders.

How Pre-Dispute Arbitration Agreements Strip Companies of Accountability

A lot more can be said about why pre-dispute arbitration agreements are bad for consumers. One of the worst parts of a pre-dispute arbitration agreement is that it strips insurance companies of accountability. In many ways, arbitration agreements are used by businesses to avoid the courts and deny consumers a fair trial. The proposed policies could allow insurance companies to deny claims and commit other unethical business practices.While we have used this blog to discuss how pre-dispute arbitration agreements will damage auto insurance policies, the fact of the matter is that it covers all types of insurance! If we were to compare this proposal to a game of poker, you would be holding a pair while the insurance companies are holding a royal flush. The desk is stacked against you because these agreements deny you the right to a jury trial.The personal injury attorneys at Mike Love & Associates, LLC can review your Texas auto insurance policy at no cost.