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Why UM/UIM Claims Go to Arbitration

When you file a UM or UIM claim, you are making a claim against your own insurance company rather than suing another driver. Most auto insurance policies in Illinois include a mandatory arbitration clause for UM/UIM disputes. This means that if you and your insurer cannot agree on the value of your claim, the dispute is resolved through binding arbitration rather than a jury trial.

Arbitration is a private proceeding where one or more neutral arbitrators hear both sides and issue a decision. While it lacks some of the procedural protections of a courtroom trial, it can be faster and less expensive. Understanding the process helps you prepare effectively.

How UM/UIM Arbitration Works in Illinois

The arbitration process typically begins when one party files a demand for arbitration after settlement negotiations have stalled. Under most Illinois auto policies, the arbitration panel consists of three arbitrators: one selected by you, one selected by the insurance company, and a third neutral arbitrator chosen by the first two.

Before the hearing, both sides exchange evidence through a discovery process that is usually more limited than in a courtroom case. Medical records, accident reports, expert opinions, and witness statements are gathered and shared. Your attorney may depose witnesses or retain medical experts to support your claim.

At the hearing itself, both sides present their case much like a trial. Your attorney will present evidence of the accident, your injuries, your medical treatment, and your damages. The insurance company’s attorney will challenge the severity of your injuries, dispute causation, or argue that your damages are lower than claimed. After both sides present, the arbitration panel deliberates and issues an award.

Binding vs. Non-Binding Arbitration

Most Illinois UM/UIM arbitration clauses provide for binding arbitration, meaning the arbitrators’ decision is final and enforceable. There are limited grounds for appealing a binding arbitration award, so thorough preparation is essential.

Some policies may allow non-binding arbitration, where either party can reject the award and proceed to court. Check your policy language carefully or have your attorney review it to understand which type applies to your claim.

Preparing for a Strong Arbitration Case

Success in UM/UIM arbitration depends on the strength of your evidence. Key elements include comprehensive medical documentation linking your injuries to the accident, evidence of the at-fault driver’s lack of adequate insurance, documentation of all economic losses including medical bills and lost wages, and testimony about how the injuries have affected your daily life and long-term functioning.

Having an experienced attorney is particularly important in arbitration because insurance companies take these proceedings seriously and come prepared with their own experts and legal arguments. The personal injury lawyers at Parker & Parker have extensive experience presenting UM/UIM arbitration cases in Central Illinois.

What Happens After the Arbitration Award

If the arbitration panel rules in your favor, the award will specify the amount your insurance company must pay. Most insurers comply with arbitration awards promptly. If your insurer refuses to pay or delays unreasonably, this may constitute bad faith, which can expose them to additional liability.

If you are facing a UM/UIM dispute with your insurance company, do not try to handle arbitration on your own. Contact Parker & Parker to discuss your claim and learn how we can advocate for you throughout the arbitration process.

Injured? Get a Free Case Review.

The personal injury attorneys at Parker & Parker have been fighting for accident victims in Peoria and across Central Illinois for over 25 years. Call (309) 674-0044 or contact us online for a free, no-obligation consultation.

Frequently Asked Questions

Do UM/UIM claims go to court in Illinois?

Most UM/UIM claims in Illinois are resolved through arbitration, not court, because auto insurance policies typically include mandatory arbitration clauses for UM/UIM disputes.

How does UM/UIM arbitration work?

A panel of three arbitrators hears evidence from both sides in a hearing similar to a trial. Both parties present their case, and the panel issues an award determining the amount of compensation.

Is a UM/UIM arbitration award final?

In most cases, yes. Most Illinois auto policies require binding arbitration, meaning the decision is final with very limited grounds for appeal. This makes thorough preparation essential.

Being hit by an uninsured or underinsured driver can leave you feeling helpless. Our our personal injury practice know how to navigate these complex claims.

UM/UIM Arbitration in Illinois: What to Expect