How do I dispute car insurance claim pricing?

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Joel Ohman
Founder, CFP®

UPDATED: Jul 4, 2016

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Here's what you need to know...
  • If you disagree with your car insurance companies offered settlement, get an appraisal by an independent adjuster.
  • The next step if you don’t get anywhere with your insurance company after hiring an adjuster, is to use a mediator.
  • If mediation does not work, you can sue your insurance company, but the cost for legal representation on both sides is quite high, and hopefully this step can be avoided.

It is rather common to need to dispute car insurance claim pricing. Quite often, when policyholders make a claim, the insurer will try its best to minimize the amount it has to pay out.

This is rather unfortunate considering the fact that most car owners purchase a policy with good faith that when they need their insurance coverage, it will be there for them. Most consumers never expect to have to fight for what is rightfully due them.

Even if the insurance company usually excels at customer service, it is all too common to find that they are less than genial when claims need to be paid.

If you have problems getting paid the fair amount of the claim you filed, you will need to dispute the claim pricing. In order to do so, you must follow these 3 steps.

Step 1: Get an Independent Appraisal and Appropriate Documentation

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If you and the insurer do not agree on how much should be paid out for a specific auto insurance claim, you will need to get an independent appraiser involved.

He or she can evaluate exactly how much the damage to your car should be valued at. Because of this impartiality, he or she is the ideal judge of the amount that should be paid out. Following the appraisal, this third party will give his results to both you and the insurer.

Typically, an appraiser hired by the insurance company will do the initial appraisal. Such findings are almost always skewed in favor of the insurer.

You also need to make sure that you have a copy of all the documentation regarding your claim. Carefully document any and all communication you have with the insurance company, including:

  • emails
  • letters
  • phone calls

Do your own research using Kelly Blue Book to determine the value of your vehicle.

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 Step 2: Find a Mediator

The next option is to get a mediator involved in the situation. A mediator is an impartial third party whose job it is to recommend a solution to the impasse and help you resolve the conflict over your car insurance claim.

Typically a mediator is a professional who will evaluate the information provided and do necessary negotiations with the insurer to avoid having to go to court and incur the costs of attorneys in order to deal with the conflict.

The mediator is supposed to come up with a solution that is acceptable to both sides.

Step 3: If All Else Fails, Opt for Arbitration


Arbitration is a last resort if mediation does not work. You will need to get a lawyer to work on your behalf for arbitration and you should know that the cost is high. However, if the case goes to arbitration, any ruling is binding.

Therefore, you will get what is owed you by the insurer or you may sue him in court. It is very expensive to go this route, but if you do so make sure that you include your legal fees in the settlement.

Realistically, disputes resulting from a car insurance claim should not go to court. Negotiating a deal for both parties is the best possible option, as it saves both parties time and money.

Insurers realize this and when they see that you are serious and have hired an independent appraiser and a mediator, they are typically very easy to negotiate with. Just remember that if you’ve come this far, you may need to go to court if all else fails.

If you have difficulties dealing with a car insurance company regarding claims, you should take that as a sign that you should change insurers. Take the time to get a variety of quotes and compare prices and coverage thoroughly.

When you have narrowed down your choices based on price and the financial stability of the different insurers, check into the company’s customer service record.

You can get detailed information from your state department of insurance about complaints filed against any insurer licensed in your state. You can also get a lot of information on claims complaints by customers by doing a simple online search.

If you notice a pattern of complaints, you may want to avoid the company. Unfortunately, many of the lowest prices you will find are from insurers who are difficult to deal with when the time comes for claims.

You pay your insurance premium so that you are covered when losses occur. Take the time to make sure that the company you buy your policy from will be willing to pay you fairly and expediently when and if you need it.

Get started today shopping around for car insurance coverage by using an online quote tool to quickly and easily get a variety of quotes from companies serving your area. It’s simple to get started right now.

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