Disaster Mediation

The Commissioner of Insurance may issue an order activating the Disaster Mediation Program following a state of disaster proclaimed by the Governor or declared by the President. Eligible individuals who have had a homeowners insurance claim partially or completely denied can request a mediation conference in which an independent mediator with no connection to the insurance company will facilitate discussion between the insurance company and the policyholder to help them reach a resolution.

The Program becomes available to first party claimants only after:

  1. A state of disaster has been proclaimed by the Governor or declared by the President, for all of North Carolina or for an area within the state, within 60 days following the disaster, and
  2. The Commissioner of Insurance then issues an order establishing the mediation procedure.

The Department of Insurance contracts with an organization who administers this program. 


Disaster Mediation FAQs

What is the Disaster Mediation Program?

What is the Disaster Mediation Program?

The Disaster Mediation Program is an added consumer alternative to facilitate fair and timely handling of disputed residential property insurance claims arising out of certain natural disasters. It gives a consumer the right to attend a mediation conference with his/her insurance company, in order to resolve such claim disputes. An independent mediator, who has no connection with the insurance company, will be in charge of the mediation conference.

Mediation is a non-adversarial, alternative dispute resolution procedure designed to facilitate the resolution of disputed claims as fairly and quickly as possible. During the mediation conference, a neutral mediator attempts to help the  consumer and insurance company agree on an acceptable resolution to the disputed claim. The mediator cannot,  however, make a decision on the claim.
 

What is considered a “disaster”?

What is considered a “disaster”?

A disaster is an event for which:

  • a state of emergency is proclaimed within 60 days of occurrence for the State, or for  an area within the State, by the Governor or by a resolution of the General Assembly, or 
  • the President of the United States issues a major disaster declaration for the State or for an area within the State under federal law; and
  • the Commissioner of Insurance issues an order activating the mediation procedure authorized by North Carolina law.
     
Which claims are eligible for mediation?

Which claims are eligible for mediation?

To be eligible for a mediation conference, all of the following criteria must be met:

  • The disputed claim must have arisen from a declared state of disaster, and the Commissioner must have activated the Mediation Program.
  • The insurance company has denied all or part of the claim.
  • The dispute must be over the amount of the loss, or the insurance company’s findings on the cause of loss.
  • The total amount of the claim is more than the consumer’s deductible.

The total amount of the claim, or the difference in position between the consumer and insurance company, must be at least $1,500 unless both parties agree to mediate a smaller claim.

Disputed claims do not include those for which the insurance company has reported allegations of fraud, or claims that have been denied on the basis of policy exclusions, policy terms or conditions, or policy not being in effect at the time of loss.

Example One

A consumer disputes insurance company’s decision on a claim for which he/she is requesting a total settlement of $1,300.

This does not meet the definition of "disputed claim" because the total amount of th eclaim is less than $1,500.

Example Two:

A consumer disputes insurance company’s decision on a claim for which he/she is requesting a total settlement of $10,000. The insurance company is offering $8,000.

This does meet the definition of a "disputed claim" because the total amount of the claim is more than $1,500 or because the two parties are more than $1,500 apart.  

What types of insurance coverages are subject to the Program?

What types of insurance coverages are subject to the Program?

 Any consumer that has a disputed disaster-related residential property insurance claim may request mediation.  

Commercial insurance claims, National Flood Insurance Program claims, motor vehicle insurance or liability coverage contained in property insurance policies are not eligible.
 

How does a consumer request mediation?

How does a consumer request mediation?

 A consumer must request a mediation within 60 days after the consumer’s eligible claim is denied in whole or in part. 

A consumer can request a mediation by: 
• Notifying his/her insurance company that you dispute the company’s denial or settlement offer, and request mediation. 
• Notifying the Program Administrator (American Arbitration Association) that he/she requests mediation.

Contact Information

American Arbitration Association
Attn: NC Insurance Mediation
1301 Atwood Avenue, Suite 211N
Johnston, RI 02919
Phone: 866-293-4053
Fax: 866-644-0234
Email: NCDisasterMediation@adr.org
Website

Once the insurance company is notified of the dispute, it must, within 5 days, mail the consumer a written notice of his/her right to mediate. This notice must include:

  • Detailed instructions on how to request mediation; including name, address and phone and fax numbers for the Program Administrator.
  • The insurance company’s address and phone number for requesting additional information.
What if I've already gone through the company’s appraisal?

What if I've already gone through the company’s appraisal?

A consumer that has gone through the appraisal process can participate in the Mediation Program at the conclusion of that process.

However, if a consumer has initiated legal action against the insurance company, he/she will not be eligible for the Mediation Program.

What is the Administrator’s role?

What is the Administrator’s role?

 The Administrator will handle all administrative duties for this Program, including accepting and reviewing the requests for mediation, scheduling the mediation conferences, and selecting the mediators.
 

Who will be the mediators?

Who will be the mediators?

Mediators will be selected by the Administrator. In order to be approved, a mediator must be certified by the Dispute Resolution Commission; or, if not, shall be approved at the discretion of the Administrator only if the parties agree on the selected mediator and the selected mediator is a licensed attorney in North Carolina in good standing with the North Carolina State Bar.
 

Are surplus lines carriers, underwriting associations and the National Flood Insurance Program subject to the mediation requirements?

Are surplus lines carriers, underwriting associations and the National Flood Insurance Program subject to the mediation requirements?

 Surplus lines carriers and underwriting associations are subject to the requirements. However, the National Flood  Insurance Program is not subject to the requirements.
 

What will the Mediation cost me?

What will the Mediation cost me?

There is no cost to consumers. Insurance companies will bear the cost of the program.