Forum Selection Clause selects the geographical area of the dispute.

In order for this clause to apply, the dispute must be between the insurance company and the insured.

Forum Selection Clause is called different things in different policies, but it appears in every one of them. It is designed to name the forum state (the state where the dispute would be heard).

This only applies in case of a dispute between the insured and the carrier and usually is the state where the policy was intended to be used. If you garage your vehicle Delaware, then most likely any dispute between you and the insurance company will be heard in Delaware.

You could buy a policy in Washington, for your automobile in Nevada, but you are involved in and accident in Montana. Where will be this dispute heard? In Nevada because that is where the policy was intended to be used (unless the forum selection clause changes that). Note that I am speaking of disputes (usually arbitration), for formal lawsuits against the insurance company, the Federal Rules of Civil procedure applies.

Note that this is different from a Choice of Law clause (follow the link below). The Forum Selction Clause is designed to determine the physical and geographical place of the dispute and nothing else. This could be critical to the resolution of a dispute. If you have to go to Florida to fight your dispute with your insurance company that you have in Alaska, well it could be difficult to win.

It will be hard to obtain witnesses, evidence, testimonies, making it very hard for you. Remember that this clause could be defeated if it will be grossly unfair to you to defend your case in that state. You would have to prove the “grossly unfair” part.

An example of this clause is: “all disputes between Carrier Name and the insured will be resolved in Florida.”

Compare and Contrast Forum Selection Clause with Choice of Law. This is an important distinction.

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