Reminder: Auto and Special Agreement Changes

Image of a post-it note with the words Don't Forget written on it stuck to a keyboardAs announced in the January E-Bulletin, Arbitration Forums, Inc. (AF)’s Board of Directors approved changes to the Auto and Special Agreements. These changes would make the Auto forum the exclusive forum for automobile physical damage disputes, whether the disputed issue concerns third-party contribution or concurrent coverage. Special Arbitration would remain compulsory for disputes involving third-party BI settlements, non-automobile property damage contribution or concurrent coverage, and workers’ compensation subrogation.

The changes will be implemented in two parts:
  • Effective December 2021, concurrent coverage disputes will become compulsory under the Auto forum.
  • Third-party contribution disputes will remain under the Special forum until 2022.
Below is the Agreement language that will go into effect.

Article First: Auto and Special Agreements
Bolded text shows changes.

Auto
Signatory companies must forego litigation and arbitrate any personal, commercial, or self-insured automobile damage dispute through Arbitration Forums, Inc. (hereinafter referred to as AF) where:
(a)    a subrogated insurer or self-insured seeks recovery from an at-fault party(ies); or
(b)    each has issued separate policies of property or casualty insurance providing, or as a self-insured provides, concurrent coverage to the same party or parties asserted to cover an accident, occurrence, or event out of which a first- or third-party claim or suit for automobile damage arises.

Special
Upon settlement of a claim or suit, signatory companies must submit any unresolved disputes to Arbitration Forums, Inc. (hereinafter referred to as AF) where:
(a)    each has issued a policy of casualty insurance covering, or as a self-insured covers, one or more parties asserted to be legally liable for an accident, occurrence, or event out of which the claim or suit arises; or
(b)    each has issued separate policies of property or casualty insurance providing, or as a self-insured provides, concurrent coverage to the same party or parties asserted to cover an accident, occurrence, or event out of which a first- or third-party claim or suit for bodily injury or non-automobile property damage arises; or
(c)    a workers’ compensation carrier or a self-insured seeks to recover reimbursement of workers’ compensation benefits from an alleged tortfeasor.

Example Cases:
  • (Concurrent Coverage) A car being used as a temporary replacement vehicle is returned to the rental car company with moderate damage to the right quarter-panel. The renter's collision carrier denies the subrogation claim based on the insured's/renter's assertion that the damage was already there when the vehicle was rented. The matter will now be submitted under the Automobile Subrogation Arbitration Agreement.
  • (Contribution) Two vehicles collide and veer into a third vehicle resulting in injuries to the driver of the third vehicle as well as property damage. The carriers for the two vehicles can’t agree on the apportionment of liability. The case is settled with the third party on behalf of both vehicles and the case is submitted under the Special Arbitration to apportion liability and damages, if disputed.


Article published in: November 2021 E-Bulletin