How do I contest the amount of a car insurance payout?

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Joel Ohman
Founder, CFP®

UPDATED: Nov 2, 2016

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Here's what you need to know...
  • Car insurance payouts are based on the damage done to your car if it needs to be repaired, or the value of your car if it is totaled
  • Keeping service records can help you receive more in your insurance payout if your car is totaled and had been well-maintained
  • Keeping receipts of upgrades will also help you receive more in an auto insurance settlement
  • You can appeal an insurance payout, but make sure you include adequate documentation

Contesting the amount of an auto insurance payout is within your rights, and can be a necessity. Car insurance is not only required if you drive a vehicle, it is also meant to protect you from losing money, your vehicle, or your assets.

If you should get into an accident, or if something else should happen to your vehicle, car insurance can help you repair or replace your vehicle if you have the right type of coverage.

Get started comparing car insurance rates today by entering your zip code into the rate tool above.

Having the right coverage and adequate coverage is important. But when it comes to a car insurance payout, you do not have to simply accept the amount the car insurance company will pay. Here is what you must know to contest the amount of a car insurance payout.

How do car insurance payouts work?


A car insurance payout is the amount that is paid to you when your car needs repairs or is totaled.

The first step in receiving a payout is to file a claim. Most car insurance companies have several options available to file a claim:

  • You can mail in a claim (this is not the recommended way because it takes more time).
  • You can call and file a claim over the phone.
  • You can go to your insurance company’s local office.
  • You can go to your insurance company’s website and file a claim online.

Filing a claim involves providing the details of the damage to your car. The insurance company will contact you and several things can happen depending on your insurance company.

If the damage is minor, the company will either tell you to take it to a garage or ask you to go to one of their garages. You have the option to choose.

Some insurance companies will make it sound like you don’t have a choice, you must use their garage, but you do have a choice. If you have a mechanic you trust or a garage you have gone to in the past, you can choose to take it there.

If you car has extensive damage, the insurance company will most likely send an insurance adjuster to you.

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The adjuster will view the damage to the vehicle, consult a mechanic as to repair possibilities and determine if the car should be repaired or should be recorded as a total loss. Again, you have the right to dispute their determination.

You can get a second opinion from another mechanic or pay for an independent insurance adjuster to view your vehicle.

If your car is totaled or deemed a total loss, the insurance company will give you the cost of the vehicle. Here is where the tricky part comes in. You want to get the most for your vehicle and a fair amount that you deserve.

When the insurance adjuster gives you a price, make sure to read through the notes that accompany the proposed amount. If you do not agree with the amount or any of the reasons leading up to the amount, you can contest it.

How are auto insurance payouts contested?


The first step in contesting the amount of a car insurance payout is to research the fair market value of your vehicle.

Basically, what would your vehicle go for as of today, if you tried to sell it?

Next is to assess, from this amount, if your vehicle was worth more or less than the market value. This is where documentation will come in and this is where insurance companies will be picky.

For example:

  • Have you gotten oil changes consistently?
  • Did you have recent repair work or replacement work done on your vehicle?
  • Did you add any upgrades such as a remote start or higher quality tires?

Any of these can increase the fair market value of your vehicle.

On the other side of the coin are these questions:

  • Has the vehicle been in any accidents?
  • Was proper maintenance such as oil changes neglected?
  • Were the tires is bald condition?

Any of these decrease the fair market value of your vehicle.

This is why it is important to keep documentation of any work you have had done on your vehicle. If you don’t agree with insurance company’s amount, protest.

File an appeal with your supporting documentation and wait for a new amount to be issued. Most insurance companies will honor an appeal when adequate documentation is presented.

Another way to ensure that you receive a fair claim amount is to get insurance through a company you can trust with a good reputation.

To find a company, you can use our online comparison tool. This type of tool will allow you to view rates, coverage, and quotes from several companies in one place. Once you find the company that is right for you, you can purchase your new policy online.

Enter your zip to start comparing car insurance quotes online now!

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