DEFINITION of 'Alternative Dispute Resolution'

In an insurance sense, a number of disparate processes used by insurance companies to resolve claim and contractual disputes. Insured clients who are denied a claim are offered this course of action as a form of recourse. Alternative dispute resolution is employed to avoid expensive and time-consuming litigation and arbitration.

BREAKING DOWN 'Alternative Dispute Resolution'

Alternative dispute resolution can take many forms. Examples of this type of resolution are non-binding arbitration and simple, direct negotiation between the insured and the carrier. In some cases, a neutral third party can be brought in to act as a mediator, if necessary.

RELATED TERMS
  1. Arbitration

    Arbitration is a mechanism for resolving disputes between investors ...
  2. Mandatory Binding Arbitration

    A contract provision that requires the parties to resolve contract ...
  3. Waiver Of Subrogation

    A special type of endorsement on a property-casualty insurance ...
  4. Insurance Claim

    A formal request to an insurance company asking for a payment ...
  5. Broad Form Insurance

    Insurance coverage that extends beyond the basics to include ...
  6. Bureau Rate

    A standard price per unit of insurance set by a state's insurance ...
Related Articles
  1. Financial Advisor

    How To Handle A Serious Dispute With Your Broker

    Find out what to do if you have a dispute with your broker.
  2. Financial Advisor

    Is Your Broker Ripping You Off?

    We show you how to resolve a problem without getting the lawyers involved.
  3. Financial Advisor

    When A Dispute With Your Broker Calls For Arbitration

    Do you have a claim you'd like to file? We'll take you through this process step by step.
  4. Insurance

    What To Do When Your Insurance Company Won't Pay

    Struggling to get a claim honoured? Find out what you can do.
  5. Financial Advisor

    New Year's Resolutions: How to Help Clients Adhere

    Clients setting new resolutions is one thing, but it can be hard to achieve financial goals for some people. Here's how advisors can help.
  6. Personal Finance

    3 Financial Resolutions You Can Stick to

    Many people fail to keep their New Year's resolutions because they are too vague. Use these three modified resolutions to get your finances back on track.
  7. Insights

    How Insurance Companies Detect Insurance Scams

    Insurance companies have full fraud detection departments tasked with both preventing scams and recouping money paid out for false claims.
  8. Insurance

    What Happens If Your Insurance Company Goes Bankrupt?

    When insurance companies go bankrupt or face financial difficulty, it's bad news for policy holders.
  9. Insurance

    Exploring Advanced Insurance Contract Fundamentals

    Understanding your contract can help you protect our family's financial security.
RELATED FAQS
  1. Bob is a registered representative who recently left ABC Securities and has now ...

    The correct answer is c. Monetary disputes within the securities industry are settled through the NASD Code of Arbitration, ... Read Answer >>
  2. What are some examples of credit report errors that I can dispute?

    Discover how to get access to your consumer credit report, identify incorrect information, and communicate with creditors ... Read Answer >>
  3. Can my insurance company refuse me coverage?

    Insurance isn't always as straightforward as other products. Insurers can deny coverage in many different instances:Non-Renewal ... Read Answer >>
  4. What is the average return on total revenue for the insurance sector?

    Learn about the three main segments of the insurance industry, and find out what the average return on revenues is for the ... Read Answer >>
Hot Definitions
  1. Agency Theory

    A supposition that explains the relationship between principals and agents in business. Agency theory is concerned with resolving ...
  2. Treasury Bill - T-Bill

    A short-term debt obligation backed by the U.S. government with a maturity of less than one year. T-bills are sold in denominations ...
  3. Index

    A statistical measure of change in an economy or a securities market. In the case of financial markets, an index is a hypothetical ...
  4. Return on Market Value of Equity - ROME

    Return on market value of equity (ROME) is a comparative measure typically used by analysts to identify companies that generate ...
  5. Majority Shareholder

    A person or entity that owns more than 50% of a company's outstanding shares. The majority shareholder is often the founder ...
  6. Competitive Advantage

    An advantage that a firm has over its competitors, allowing it to generate greater sales or margins and/or retain more customers ...
Trading Center