What is the primary purpose of alternative dispute resolution in insurance claims?

The primary purpose of alternative dispute resolution (ADR) in the context of insurance claims is indeed to resolve disputes, particularly between insured parties and insurers, without the need to proceed to court. ADR encompasses various methods such as mediation, arbitration, and negotiation, which are designed to provide an efficient and cost-effective way to settle disagreements. This process is beneficial because it can reduce the length and expense associated with traditional litigation, enabling parties to reach a mutually agreeable resolution.

Choosing ADR facilitates a more collaborative approach to resolving disputes, often leading to outcomes that are satisfactory for both sides. It also helps alleviate the burden on the judicial system, allowing courts to focus on cases that require formal intervention. This process is especially valuable in the insurance industry, where disputes can arise over claims made by policyholders or third parties, and resolving these issues amicably and expediently is often a priority for both insurers and insureds.