What must an insurance policy provide regarding claim disputes?

An insurance policy must provide an arbitration process for claim disputes. This requirement is essential because arbitration offers a structured method for resolving conflicts outside of court, which can be more efficient and less costly for all parties involved. The arbitration process typically involves both parties agreeing to submit their dispute to an impartial third party, who then makes a binding decision.

This process is preferred in many insurance contracts because it allows for quicker resolutions and can reduce the burden on the judicial system. The use of arbitration helps ensure that policyholders have access to a fair mechanism for dispute resolution when issues arise with their claims. This is particularly important in the insurance field, where the complexities of policies and claims can often lead to disagreements.

While other options like breach of contract terms, court settlement procedures, and negotiation options may be relevant in broader legal contexts, they do not specifically address the structured resolution of disputes that arbitration provides. Thus, the inclusion of an arbitration process in the insurance policy is crucial for facilitating effective claims management and ensuring both parties can resolve issues in a predefined manner.