Federal Judge Sends Service Contract Dispute to Arbitration

JACKSONVILLE, Fla. - A battle over reinsurance coverage for extended motor vehicle service contracts was sent to arbitration on Aug. 1 by a Florida federal judge. Northbrook Indemnity Co. v. First Automotive Service Corp., No. 3:07-cv-683-J-32, M.D. Fla.

Judge Timothy J. Corrigan of the Middle District of Florida ruled that the dispute is covered by the arbitration provision in an aggregate excess of loss reinsurance agreement.

First Automotive Service Corp. insures extended vehicle service contracts marketed by Mechanical Breakdown Protection Inc. to automobile dealers and vehicle owners. First Automotive Insurance Risk Retention Group Inc. (FAIRR) insures First Automotive.

Northbrook Indemnity …