How can I regulate my car insurance claims payouts?

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Joel Ohman
Founder, CFP®

UPDATED: Oct 28, 2016

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Here's what you need to know...

  • Policyholders cannot regulate car insurance companies, but they do have some control over the amount of money they are paid out in claims
  • When a consumer has their car insurance claim approved, cash payment is made to cover the cost of damages done to the vehicle, car rental fees, and medical bills
  • If you do not believe that you are being fairly compensated by your auto insurer, you may be able to have your claim reconsidered

Many consumers depend on their car insurance provider’s internal accident investigation department to determine the amount of money that they will be paid for damages.

If you have submitted a claim with the insurance company of another driver, you may have even more difficulty being paid a fair sum of money. Only your state insurance commissioner and Department of Insurance has the power to regulate auto insurers.

However, consumers do have considerable power in numbers.

Enter your ZIP code into the FREE tool for better online car insurance rates!

How do car insurance companies determine how much to pay on claims?


Having your car damaged as a result of your own actions or the negligence of another motorist is never a pleasant ordeal.

The time that it takes for your car insurance company to fully investigate your claim will have a major impact on how long you will be inconvenienced, as well as your total expenses.

The Maine Bureau of Insurance explains how car insurance providers are responsible for paying out on insurance claims.

Even if you have been told by several mechanics that it will cost several thousand dollars to have your vehicle repaired, your insurance company may disagree.

Insurance providers regularly pay out the least amount possible on insurance claims.

While you may already have had brand-new replacement parts installed on your vehicle at your preferred auto shop, your car insurance company may see things differently.

Used and refurbished car parts pulled from vehicles that have been totaled are normally used by insurance claims adjusters to determine the value of payouts.

Insurance adjusters don’t just work to reconstruct the events leading up to accidents or to establish which driver is more at fault; they also strive to keep the total amount of money paid out on claims to a minimum.

Although you may not receive an insurance check that is large enough to purchase brand-new auto parts, it should still be reasonable.

If you are able to counter your insurance company’s proposed claims payout with a few estimates from reliable auto mechanics, you may receive more money than what was first offered.

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What if your car insurance payout isn’t enough to pay your bills?

While you may have a great relationship with your car insurance agent and receive prompt assistance, your car insurance claim may still not go your way.

Using websites like Consumer Affairs to make public complaints about your disagreement will likely make you feel better, but it may not change the outcome.

If the amount of money that your auto insurance provider has paid out is completely unreasonable, you may end up needing to hire a lawyer.

When the primary vehicle of a car insurance policyholder has been disabled, repairs have to be made in a timely manner. If you cannot wait for your claim to be reconsidered, try to make a payment arrangement with your mechanic for the time being.

What happens if my car insurance policy is canceled after a claim is made?

payout following a car accident claim

Since auto insurance companies do have the right to protect themselves from policyholders that become too much of a burden, it is possible to have your coverage canceled after submitting a claim.

You cannot have your insurance recalled fewer than ten days after being notified in the mail in Texas, but this is not true in all states.

Most motorists are able to find a new car insurance provider soon after learning that their coverage is being canceled.

If you have not been able to find a car insurance company that will issue a new policy, check to see if your state Department of Motor Vehicles has any sponsored car insurance programs.

You can be put in contact with high-risk car insurance providers that are contracted to keep motorists in your state of residence insured within the legal limits.

If you have reason to believe that your insurance provider dropped your coverage unfairly, you can follow up with the agencies that govern insurance companies in your state.

To see how you can save on online car insurance, type your ZIP into the free box now!

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