Car Insurance Claims: Disputes and Lawsuits

Sometimes after an accident or car insurance claim, disputes arise between the insurance company and the insured driver. Whether your insurance company is a big, bureaucratic organization or a small local insurance agency, these tips will help you in any car insurance claim dispute.

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How to Dispute the Claim Adjuster's Offer

The insured should seek three written estimates from professional, independent auto body repair shops. The insured might likewise seek a private adjuster to evaluate the claim; professional and private adjusters will be able to review the claim and even act as a liaison.

If the insurance company continues not to pay the claim, the insured should contact the state insurance commissioner and/or hire an insurance attorney.

How to Dispute a Totaled Vehicle Settlement with the Insurance Company

Review the settlement documentation for errors. In many cases, the valuation report does not include manufacturer or dealer upgrades/options. If an insured receives a settlement that is not satisfactory, they should immediately contact the insurance company and express their opinion politely but firmly. If the adjuster remains adamant, contact their supervisor and be prepared to hire a private adjuster or an attorney.

How to Dispute if Your Car Is Totaled

Car insurance companies usually deem vehicles totaled when repair costs exceed 75% or more of the car’s cash value (determined by private sale value). The car’s cash value can be calculated by deducting depreciation, wear and tear, and prior damage.

If a policyholder believes the estimate to be inaccurate, request a copy of the adjuster’s vehicle analysis and review it for errors. Check the documentation’s accuracy of the mileage, the transmission type, and trim level. Report any errors to the adjuster and request a new assessment.

Obtain written estimates stating the cost of repair would be less than the cost of totaling the vehicle and present them to the adjuster and/or their supervisor.

What to Do When You Can't Resolve a Dispute with the Car Insurance Company

Should the insured not be able to resolve a dispute with their car insurance company after exhausting all other internal avenues, they should first seek independent estimates that corroborate the value of the claim versus the claim amount offered by the insurance company.

Next is to invoke the appraisal clause of the insurance policy. This clause states in the event the policyholder and insurance company cannot reach an agreed resolution, both parties may hire independent adjusters.

What is Subrogation?

Simply put, subrogation is when an insurance company pays a claim to its insured and then looks to another party to reimburse the paid claim. Instances of subrogation in automobile insurance usually relate to a claim filed by a policy owner when another party is responsible or is at fault for the damages.

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How to File a Lawsuit After You've Settled with the Car Insurance Company

Even if a settlement has been issued in an insurance claim, the policyholder or the estate of the insured may still file a lawsuit. The reasons vary, from bad faith to not including all interested parties. Those wishing to pursue legal action after a settlement should contact an attorney.