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Choice of Law Clauses

These clauses are designed to pick the State law that will control a dispute

Choice of Law Clause

The insurance company can decide the state law that will be used to resolve a dispute with the insured.
For example, you could be in Montana and go to arbitration.

The arbitrator will be instructed to follow the rules of New York (if that is the state law selected) when solving the dispute.

Forum selection clauses (follow the link at the end of this page) give you the geographical place where the dispute will be heard. However, the choice of law clause gives you the state law that will control the case.

If the policy is silent regarding the issue of what state law will control the dispute, then the insurance laws of the state where the vehicle was intended to reside will be the governing law, as stipulated in the choice of law clause.

This clause can be the single most powerful weapon of your insurance company. Be aware of it!

You could have your car and policy in New York, have an accident in New York, live all your life in New York, never leaving the city to even visit another place, and once you have a dispute with the insurance company, just end up using Delaware laws!

Note that this will apply to disputes about insurance issues, not the rules of the road where the accident actually happened (the fault or liability portion).

Most insurance policies do not contain this type of clause, but some do. Some states will not enforce a Choice of Law Clause, but again some will. Therefore, you need to be aware of it.

This clause or term could have a significant impact on your dispute. Different states have different limits and laws.

Your insurance company will most likely try to make you follow the laws of the state that is most beneficial to them.

An example of this clause is: all disputes between “Carrier Name” and the insured will be resolved using North Dakota law.

Click below for an explanation of insurance coverages and terms:

Coverages and Terms Overview

Automobile Liability Insurance or Liability Page 1
Automobile Liability Insurance or Liability Page 2

Automobile Medical Payments or Personal Injury Protection (PIP) Page 1
Automobile Medical Payments or Personal Injury Protection (PIP) Page 2

Collision Coverage (Protection Against Loss to the Auto) Page 1
Collision Coverage (Protection Against Loss to the Auto) Page 2

Comprehensive Coverage (Protection Against Loss to the Auto) Page 1
Comprehensive Coverage (Protection Against Loss to the Auto) Page 2

Under or Uninsured Motorist Property Damage (UMPD) Page 1
Under or Uninsured Motorist Property Damage (UMPD) Page 2

Under or Uninsured Motorist Bodily Injury (UMBI)

Rental Reimbursement or Loss of Use Coverage Page 1
Rental Reimbursement or Loss of Use Coverage Page 2

Restoration Coverage

Towing and/or Road Assistance Coverage (Emergency Packages)

 

Insurance Clauses and Terms

Overview
Actual Cash Value or ACV
Additional Insurance Clause
Cancellation of Coverage Clause
Choice of Law Clause
Forum Selection Clause

Duty to Cooperate Clause
Duty to Report Losses Clause
Financial Responsibility Clause
Insurable Interest Concept
Interpretation of the Policy Concept

Mandatory Arbitration Clause
Mitigation of Damages Clause
Non Duplication of Benefits Clause
Proof of Loss Clause
Promissory Estoppel Concept

Reservation of Rights Concept
Reasonable and Necessary Clause
Right of Appraisal Clause
Right of Settlement Clause
Rights of Counsel Concept

Subrogation of Rights Clause Part I
Subrogation of Rights Clause Part II
Statute of Limitations Concept
Replacement Cost Value
Restoration Coverage
Transfer of Benefits Clause

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