What would likely happen if negotiations between a policyholder and an insurer fail?

If negotiations between a policyholder and an insurer fail, it is likely that litigation may be pursued as an option. When parties are unable to come to an agreement during negotiations, typically the next step for either party is to seek legal recourse. This often means that the policyholder may file a lawsuit against the insurer to resolve the dispute over the claim, seek compensation, or address any issues that led to the breakdown of negotiations.

This option reflects the legal nature of disputes in insurance practices, where formal legal action is a recognized and common method for resolving disagreements when amicable solutions cannot be achieved. Therefore, pursuing litigation is a logical sequential step when negotiations fall short.