Many people may be unaware of a very helpful statute in RI which requires insurance companies to submit to arbitration before a lawsuit is filed. According to RIGL 27-10.3-1, any insurance policy written in the State of Rhode Island must include a provision for arbitration if the case is valued under $50,000.
This statute is incredibly helpful for difficult personal injury cases that don’t have a particularly high value. In Rhode Island, it can literally take years before a lawsuit is reached for trial and if you go the whole distance the costs can skyrocket into the thousands or tens of thousands. For that reason, it doesn’t always make sense to file a lawsuit, particularly on cases that are worth 15-25k. For these types of cases, this arbitration provision can be a lifesaver. If the insurance company is disputing liability or just making a low-ball offer, then filing statutory arbitration may be the best bet.
Our office uses this tool a great deal. When insurance companies like Allstate, Progressive and Liberty Mutual (these 3 in particular) want to make ridiculous low-ball offers by cutting the lost wage claim, cutting the medical bills and reducing the pain and suffering, my office often moves right to arbitration.
If you aren’t familiar with arbitration, it is a relatively simple process. Once we have demanded arbitration, the insurance company will forward the case to their defense attorney. Their attorney and I will speak and agree upon an impartial third party (another uninvolved attorney) and he or she will act as the “judge” at arbitration. Both parties will present their case to the arbitrator and he or she will make a decision. If either party is unhappy with the decision, it is non-binding, so you are not “stuck” with a decision you do not like. The plaintiff will always have the opportunity to still proceed to litigation.
But its almost always worth a try. Insurance companies do not want to pay defense counsel costs and if they know that you are willing to file arbitration then they know that you are willing to file a lawsuit which means even more time and money for them. For these reasons, filing arbitration can almost always help your offer increase especially if you are being low-balled.
If you are being low-balled by an insurance company, then this is just one more trick to know. If your attorney tells you that it is not worth filing a lawsuit because it will cost too much money or take too much time, talk about statutory arbitration in RI. Always feel free to contact my office for a free initial consultation. Always remember, there is never any reason to accept a low-ball offer from an insurance company. Don’t let them fool you into thinking they have the upper hand!