What to Do When Your Auto Insurance Claim Is Undervalued

Dealing with a car insurance claim can be stressful, especially when the insurer’s offer doesn’t cover the full cost of repairs. Unfortunately, insurers often underestimate car claims to save money.

Here’s why this happens and what steps you can take to ensure you’re fairly compensated.

DOWNLOAD: “What to Do When Your Auto Insurance Claim Is Undervalued”.PDF

Why Car Insurance Companies Lowball Claims

Car insurance companies often aim to minimize payouts for accident claims. Here are some common reasons they might undervalue your car’s repair costs:

1. Profit-Driven Tactics: Insurers frequently start with a low offer to see if you’ll accept it, helping them save on payouts.

2. Limited Knowledge of Repair Costs: Claims adjusters might not fully understand the specifics of car repairs, leading to lowball estimates.

3. Preferred Repair Shops: Insurers often have agreements with certain repair shops that offer services at discounted rates, which may not reflect the actual costs at other garages.

4. Failure to Account for OEM Parts: Some insurers might estimate based on cheaper, aftermarket parts instead of original equipment manufacturer (OEM) parts, which are often more expensive.

Steps to Take When Your Car Insurance Claim Is Too Low

If you believe your car insurance offer is too low, you don’t have to accept it as is. Here’s how you can negotiate for a fairer settlement:

1. Ask for a Detailed Estimate Breakdown

   Start by requesting an itemized breakdown of how the insurer calculated their offer. This can help you identify areas where costs may have been underestimated, such as labor, parts, or specific repairs.

2. Gather Multiple Repair Estimates

   Get quotes from several repair shops, including both independent garages and dealerships. This can help you build a case if your insurer’s offer is significantly lower than the average estimates. Make sure the quotes include details on OEM versus aftermarket parts and labor costs.

3. Submit a Counteroffer with Documentation

   With your collected estimates, prepare a demand letter that outlines the repairs and costs. Highlight differences between the insurer’s offer and your estimates. Include:

   • A Summary of the Repairs Needed: Be specific about the work required to restore your car.

   • Comparison with Independent Estimates: Point out how the insurer’s estimate falls short compared to what you’ve gathered.

   • A Specific Counteroffer Amount: State the total amount you believe covers the repair costs, backed by your documentation.

   Presenting a well-organized counteroffer shows you’re serious about negotiating a fair settlement.

   For additional guidance and a comprehensive review of your insurance claim, you can visit Total Loss Appraisals Insurance Claim Review.

4. Consider Legal Help or a Public Adjuster

   If the insurer remains firm on a low offer, it may be beneficial to consult a lawyer or a public adjuster. They can:

   • Negotiate on Your Behalf: With their expertise, they can handle discussions with the insurer and push for a better offer.

   • Help with Complex Repairs: If your vehicle has extensive damage, a professional can ensure all repair costs are considered.

   • Assist in Case of Total Loss: If your car is deemed a total loss, they can help ensure you receive the actual cash value (ACV) rather than a lowball figure.

Tips for Dealing with Car Insurance Claims

Navigating a car insurance claim can be challenging. Here are some additional tips to keep in mind:

• Document Everything: Keep a record of all communications with your insurer, as well as receipts, repair quotes, and any photos or videos of the damage.

• Check for OEM Parts: If the insurer’s estimate is based on aftermarket parts, you may have the right to insist on OEM parts, especially if they affect your car’s performance or resale value.

• Get a Second Opinion on Damage: If the insurer insists on using a specific repair shop, consider having the work reviewed by a trusted mechanic to ensure nothing was missed.

• Know When to Settle: While it’s tempting to push for more, consider accepting a fair offer if it covers the full cost of repairs. Weigh the benefits of continuing the negotiation process against potential delays and stress.

Final Thoughts

When your car insurance company offers less than what you need for repairs, remember that you have options.

By understanding their tactics and gathering solid evidence, you can negotiate for a fairer settlement.

If the process becomes too complex, don’t hesitate to seek professional help to advocate on your behalf.

A fair payout is worth the effort, so stay persistent, organized, and informed to ensure your car is restored without breaking the bank.