Legal Question in Insurance Law in New York

Normally, 2 insurance companies that resolve a claim between themselves via arbitration will not then fight over the result. As a matter of fact, an arbitration decision is binding upon all parties and cannot be appealed unless the appealing party can show an error in law by the arbitrator. In a dispute over $250 that would not even be worth their time. Another option may be that it was a mediation and not an arbitration. The difference is that a mediation is not binding upon the parties and a losing party does not have to accept the mediators decision. Now, if you were found to be not liabile at all for the accident then your insurance company should just send you the $250 deductible and pursue collection of this money from the other insurance company through a process called subrogation. Essentially, your insurance company would step into your shoes and assert your rights against the other insurance company for reimbursement. I agree with you that it seems ridiculous. But it may be the difference between an arbitration and a mediation.