UM/UIM Arbitration in Illinois: What to Expect

Last Updated: September 16, 2026

UM/UIM arbitration is a hearing before neutral decision makers, instead of a jury, that decides fault and the value of your injuries once your insurer agrees the coverage applies. It is usually faster and less formal than a trial. How final the award is depends on your policy: many let either side reject a larger award and ask for a trial, and court review of an award is limited.

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. Illinois law requires an arbitration clause in the uninsured motorist part of every auto policy, and nearly every policy extends the same clause to UIM. Once your insurer agrees the coverage applies, a disagreement over whether the other driver was at fault, or over what your injuries are worth, goes to arbitration rather than a jury trial. Whether the policy covers the crash at all is ordinarily a question for a court, not the arbitrators.

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 make the award binding, but often only up to a set amount. Many policies let either side reject an award above that amount and demand a trial, and the Illinois Supreme Court has enforced those clauses. Below that line, court review of an award is limited, so thorough preparation is essential.

The exact terms vary from policy to policy. Check your policy language carefully or have your attorney review it to understand how final an award would be in 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.

Our Peoria UM/UIM arbitration page shows how we prepare the arbitration file step by step.

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.

Parker & Parker reviews personal injury claims for people in Peoria and across Central Illinois. Call 309-673-0069 or contact us online for a free consultation.

Frequently Asked Questions

Do UM/UIM claims go to court in Illinois?

Once your insurer agrees the coverage applies, most UM/UIM claims in Illinois that cannot be settled go to arbitration under the policy’s arbitration clause, not to a jury. A dispute over whether the policy covers the crash at all ordinarily goes to court.

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?

It depends on the policy. Many Illinois policies make a smaller award binding and let either side reject a larger award and ask for a trial. Where an award is binding, court review is very limited. This makes thorough preparation essential.

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

Need a lawyer? This article is part of our Peoria Car Accident Lawyer practice area. Call Parker & Parker at 309-673-0069 for a free consultation.