Insurance companies sometimes have a bad reputation for not paying claims like people think they should. Sometimes it’s easy to forget that insurance is designed to get people back to where they were before the claim, not any better or worse.
In an ideal world, the company would just pay the claim exactly as it should be paid: quickly and with little fuss, and at an amount that makes the insured happy. Despite what you’re thinking right now, this actually does happen quite frequently! There are insurance companies out there that have excellent claims service reputations.
However, there are other times when the insurance company does not pay as much as it should on a claim. What do you do in this case? How do you know if the company is just trying to save a few bucks at your expense?
Preparing for Claims
Before you can even properly judge if you received an appropriate amount or not, it’s important to know the value of your car. As we all know, cars depreciate with each passing mile and year. The rate of depreciation can be surprising, so it’s good to have an idea of what your car is worth. The Kelley Blue Book is a trusted 1st source for this, but it’s not the only place to go.
Generally speaking, claims adjusters will base their value on a combination of factors, including the KBB and average values in your area. So, you can take your car to a few local dealers and body shops to determine what it’s worth. If you already have had your claim, you can still ask around. Just let them know the condition of the car (be honest!) prior to the accident, year and mileage, and if there are any customizations.
You will also need to be sure that you have the insurance coverage that you want. If you want your vehicle fully covered, then you’ll need both Comprehensive and Collision coverage, which are both subject to a deductible. Make sure you also have Uninsured Motorists Property Damage. This covers your vehicle in a non-at-fault accident that is either a hit-and-run or the other driver did not carry any insurance. It can save you from having to pay a deductible.
Oftentimes people will receive a low claims check because they did not want to pay higher premiums for full coverage on their vehicle!
The Settlement Check is Still Too Low
If your claims check is still too low, the first thing to do is to inform the company of your opinion. You will likely need to send them a written letter saying that you dispute the amount of the claim.
After you’ve notified the company in writing that you’ve rejected their claim offer, you’ll need to determine exactly what the payment amount is that you’re seeking. If you’ve had a partial loss, this means that you’ll need to gather damage estimates from local body shops. If your vehicle is totaled, then you’ll need to verify your vehicle’s actual market worth by doing the steps outlined above.
Once you know what the amount should be on the claims check, you’ll need to inform the company of your requested amount and submit any appropriate documents. Claims adjusters won’t be willing to pay any more than their initial offer without seeing supporting documentation from you as to why you are wanting more money.
If your case is strong enough, there’s a good chance that the claims adjuster will meet your demands. This is what you want to happen. It’s also possible that they might make another counteroffer of an amount somewhere in between, trying to negotiate with you. If you’re convinced with your amount, then it’s best to hold firm and see if they will pay.
If they still don’t give you enough, then your weapon of last resort is to take them to arbitration or to court. You can do this if you believe the insurance company is in a “breach of contract” by not adequately compensating you, as per the insurance contract.
It’s never easy fighting insurance companies for more claims money, but if you can make a strong case as to why their check is too low, you have a good chance of getting the proper amount.