How to Know When Your Car Insurance Settlement Offer is Too Low

Last Updated on May 5, 2021

Insurance companies sometimes have a bad reputation for not paying claims like 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. It’s also easy to forget that insurance providers are companies that are also trying to make a profit.

In an ideal world, the company would just pay the claim exactly as it should be paid: quickly, 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 satisfaction scores.

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? Should you hire a lawyer to help you get more money? Below, we’re answering every question you might have about low car insurance settlement offers.

How to Know When Your Car Insurance Settlement Offer is Too LowPreparing for Auto Insurance 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 source for this, but it’s not the only place to go to get your vehicle’s actual cash value.

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 filed 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 adequate auto insurance coverage. If you want your vehicle fully covered, then you’ll need both comprehensive coverage and collision coverage, which are both subject to a deductible. Make sure you also have uninsured motorists property damage coverage. This covers your vehicle in a non-at-fault accident that is either a hit-and-run or if 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 and, therefore, their insurance policy did not cover all of the damage.

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 that you are rejecting their offer. 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 and make a counteroffer. 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.

Also, be sure to include any medical bills you might have had. If you have more severe injuries, require physical therapy, and/or lost wages, be sure to include those as well.

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.

Taking the Case to Court

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. If you take this route, you most likely will want to hire an insurance attorney to help you with your case. Oftentimes, once a lawyer is involved, an insurance adjuster will suddenly be more willing to work with you to avoid taking the case to court.

If you do need to hire a lawyer to help you with your case, you’ll have to pay the lawyer’s fees and taxes on the settlement received. Therefore, you’ll need to demand even more money from the insurance company to cover your legal fees and tax liability. There is also the possibility that you will lose your case and will be on the hook for legal fees without an adequate settlement. Please keep all of these things in mind before you decide to take the case to court.

Final Word on Low Car Insurance Settlement Offers

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. Be sure to document all expenses and damages from the accident to help you build your case with the insurance company.

If your back and forth with the insurer’s adjuster yields results you are not satisfied with, it might be worth hiring a lawyer to help you with your settlement.

Andrew Flueckiger
Andrew Flueckiger Andrew Flueckiger is an experienced insurance agent with experience in sales, management, leadership, and marketing. A graduate of Indiana University, Andrew is a licensed insurance agent specializing in personal and commercial insurance. Andrew not only holds a wealth of insurance industry knowledge and expertise, in 2016, he also obtained the Certified Insurance Counselor designation.
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