In Pennsylvania, the adjudication of uninsured and underinsured motorist claims has undergone a substantial change. Previously, all uninsured and underinsured motorist disputes were litigated in mandatory arbitration proceedings before three lawyers chosen by the plaintiff’s and defendant’s attorneys. In fact, the Pennsylvania Insurance Department would not approve an automobile policy in Pennsylvania unless it included a mandatory arbitration clause for the adjudication of such claims.
In 2005, in Insurance Federation of Pennsylvania v. Koken , by ruling upon the challenge of the Insurance Federation to this arbitration requirement, the Pennsylvania Supreme Court determined that the Insurance Department had no authority to require mandatory arbitration of UM and UIM claims. As such, the stage was set for a significant change in the manner in which UM and UIM claims would be resolved.
