In the realm of insurance claims, insurance arbitration serves as an alternative to litigation for resolving disputes over claims. Arbitration is an agreement not to pursue litigation and privately resolve disputes.Arbitration may be voluntary, meaning all parties agree, or mandatory, meaning the arbitration is part of an insurance contract. Insurance arbitration relies upon an arbitrator (the neutral third party) to make an appropriate decision based on the specifics of a claim or case. Arbitration is designed to reach a favorable outcome without the expense and time of a trial at the State or Federal Court levels.