How do I contest the amount of a car insurance payout?
If you’re not happy with a payment from your auto insurance company for a damaged or totaled car, you may want to dispute the amount. If you want to dispute your car insurance payment amount after your car insurance claim, you should prepare in advance.
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If you don’t take the proper steps, there’s a greater chance that your insurer will reject your counter offer. To help, we’ve covered all the steps you need to take to be successful in getting a higher car insurance payment, from appraising your car’s value to filing claims.
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how to dispute car insurance payment
Insurance companies may try to pay as little as possible, as large insurance payouts are not good for business. If this is the case, and you want to dispute the amount or dispute the auto insurance claim, you must have a strong argument and evidence.
You are not required to accept an offer from an auto insurance company. Still, if negotiations and a counter offer don’t work out, you may need to sue if the amount is grossly undervalued. We recommend using a lawsuit as a last resort, and only if the amount you win will pay your legal fees.
Below, we’ve outlined the main steps you can take to dispute a car insurance payment so you can see the process.
research and test preparation
If a car’s lump sum seems low, be sure to consider your car’s depreciation. depreciation starts the moment you pull your car off the lot, so your vehicle won’t be worth as much as it was a year or two ago.
You should also check how much auto insurance coverage you have, as sometimes payments are low because you don’t have a high level of coverage.
After considering depreciation and coverage, you’ll want to gather evidence from your insurer and any research they do. First, ask your insurance company how they calculated the payment, as there could be miscalculations that undervalue your car or repair costs.
Once you’ve taken a look at the calculations, do your research and gather evidence to show that the payment is low.
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Here are some of the factors you should investigate:
- maintenance and inspection records. Inspection and maintenance records may show that your car has lower mileage or is in better condition than estimated.
- compare vehicle costs or repair costs. look at similar cars in the same year and condition as yours to strengthen your argument. you can also check the repair costs in different shops.
- your use of the vehicle. It can be helpful to show how much the loss of your vehicle disrupts your daily life, for example, if you have to travel by bus or take a grocery store to work.
- your coverage level
- your auto insurance deductible
- repair costs
- value of your vehicle
Gather as much documentation as possible and prepare your argument. the more evidence you have, the more likely your insurer will accept your counter offer.
make a counter offer
once you are sure you have a strong argument, make a counter offer to the insurance company. Your argument should clearly state why the insurance company’s initial payment is low, the amount you think is fair, and your reasoning.
You can also hire an appraiser instead of making your own counter offer. An appraiser can estimate your car’s value, damage costs, and help you with your counter offer.
When negotiating a counter offer, have two numbers ready: the high amount you want and the lowest amount you will accept. always start with the highest appraisal first. Get the agreement in writing if your insurance company accepts the counter offer.
file a complaint if your counter offer is rejected
If your counter offer is rejected, you can file a complaint. the best place to file a complaint is with your state insurance commissioner.
Please provide as much evidence as possible with your complaint to expedite the process. With multiple complaints filed daily, it’s important to be patient while waiting to hear from the Insurance Commissioner’s office.
filing a lawsuit as a last resort
Filing a lawsuit is the least desirable outcome because you will have to pay to hire an attorney and take the case to court. In most cases, it’s not worth the cost and time to get an extra thousand or two in your car insurance payment.
You should only consider filing a lawsuit if you have a clear case and the amount you want will pay legal fees. otherwise, you should avoid filing a lawsuit and settle the matter out of court. insurance companies are also often motivated to keep cases out of court.
understand how car insurance payments work
It can be helpful to understand how auto insurance payments work when trying to dispute a payment.
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Insurance companies base payments on the following:
An insurance company may have an appraiser look at your car or ask you to take it to a pre-approved shop to get a quote for repairs.
If your car is totaled, insurance companies will look at similar car values to determine how to pay you. the insurer will base its offer on these estimates, your coverage and deductible.
If you have a $500 deductible and the repair estimate is $2,000, the insurance company will only offer a maximum of $1,500. Likewise, if you have the minimum coverage on your car, the insurance company may not offer a high payout, if any.
when is the insurance company considered to have totaled a car?
An insurance company will consider a car totaled if the estimated cost of repairs is greater than the value of the car. For example, if your car is worth $20,000, but the repairs will cost $25,000, your insurance company will total your car and pay $20,000 for the value of the car.
If you want to dispute the insurer’s decision to write off your vehicle as a total loss, follow the steps above to dispute an auto insurance payment. In most cases, it’s best to write the car off and invest in a new car.
Cars can be expensive to repair and may not perform well after extensive repairs, leading to more repair bills down the road.
the final word on contesting car insurance payments
You can make a counter offer if you think the insurance company is offering a low payment and you have strong evidence that your car is worth more or that the repairs will cost more than estimated. You are not required to accept an insurance company’s offer.
If your counter offer fails, you can file a complaint with your state insurance commissioner. You can choose to sue as a last resort, but you should only do so if the payment covers your legal fees.
Drivers who are dissatisfied with their insurance company can shop for new insurance using quote comparison tools to find the best rates in their area.