Arbitration is a method of dispute resolution in which an impartial third party, known as an arbitrator, is appointed to resolve conflicts between the insurance company and the policyholder.

It is an alternative to traditional litigation and is often used to settle claim disputes. During this process, the arbitrator carefully reviews the evidence and listens to arguments from both parties. They then make a binding decision, known as an arbitration award, which determines the resolution of the dispute.

Arbitration offers a faster and less formal process compared to going to court, and it may be outlined as a mandatory step in the insurance policy’s terms and conditions.