How does expert determination reduce insurance costs?
By saving your insurance company money in these three ways:
First, it involves no lawyers. So it allows the insurance company to avoid paying for your lawyer, for their lawyer, and potentially for your counterparty’s lawyer.
Second, in expert determination, the parties are required to deliver some required documentation to each other before the expert even gets involved. During that time, they can negotiate a settlement. In contrast, when a lawsuit is threatened, both parties strategically withhold documentation from each other. Insurance companies usually have to negotiate a settlement without having a lot of relevant information available to them. That is why without expert determination it is harder for the insurance company to negotiate a fair settlement, which makes it more likely that they have to slog through an expensive litigation or arbitration.
Third, consider cases where part or all of a claim against you is frivolous. Because expert determination is so low-cost, it makes it harder for the other side to threaten an expensive legal battle and – by doing that – to force the insurance company into accepting an unfairly high settlement. With expert determination, there would be no expensive legal battle. So there can be no unfair threat.
To recap, one, no lawyers, two, easier to negotiate a fair settlement, and three, no threats of frivolous lawsuits.
In conclusion, expert determination saves your insurance company money. Therefore, because you cost less to insure and you are a more valuable customer, your insurance premium doesn’t go up.
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