What settlement option is used to resolve disagreements between the insured and insurer, excluding loss value disputes?

The correct choice is arbitration. This settlement option is specifically designed to resolve disputes between the insured and the insurer in a binding manner outside of a court setting. In arbitration, both parties agree to present their case to an impartial third party (the arbitrator), who then makes a decision that is typically final and enforceable. This method is often chosen for its efficiency and the ability to resolve disputes without the lengthy process that litigation entails.

While mediation, negotiation, and litigation are also means of resolving disputes, they operate differently. Mediation involves a neutral party helping both sides communicate and come to a voluntary agreement, without making a binding decision. Negotiation is the process where both parties directly attempt to reach a settlement on their own terms. Litigation, on the other hand, is the formal legal process of resolving disputes in court, which can be time-consuming and expensive. Arbitration stands out as a distinct mechanism ideally suited for addressing disagreements where both parties have a stake in reaching a resolution while avoiding some of the complexities of other methods.