What Does Grievance Procedure Mean?
A grievance procedure is a process in which two or more parties attempt to resolve a dispute. In the context of insurance, grievance procedures often occur when a policyholder believes he or she is entitled to coverage for a specific loss, and the insurance company disagrees. Each state has its own laws regarding grievance procedures.
Insuranceopedia Explains Grievance Procedure
Grievance procedures are common in many industries and organizations. For example, labor unions often have their own grievance procedures. For insurance companies, a grievance procedure may begin with with an evaluation of the claim, then if the claim is rejected and the policyholder appeals, then the insurance company may evaluate the appeal. Finally, if no resolution can be reached, a lawsuit may occur in which the insurance company defends itself from claims from the policyholder that coverage is owed.