How Do You Contest an Insurer’s Valuation of Damages After an Accident?

Disputing an insurer’s valuation of damages after an accident is a common issue faced by policyholders, particularly if the insurer offers a settlement that seems too low or does not reflect the full extent of the damage. If you believe the insurer's assessment is unfair, there are steps you can take to challenge the valuation and seek a more accurate settlement.

Steps to Contest an Insurer’s Valuation of Damages

1. Review the Insurance Policy: Start by reviewing your policy to understand what is covered, how damages are assessed, and whether there are any specific clauses related to the insurer’s valuation process. This ensures that you're aware of the terms under which the insurer is operating and the extent of your coverage.
2. Understand the Insurer's Valuation Process: Insurers typically rely on adjusters to assess the extent of the damage. Ask for a detailed breakdown of how the insurer arrived at their valuation. Request copies of any reports, estimates, or photographs used to support the valuation.
3. Get Your Own Repair Estimates: If you believe the insurer’s valuation is too low, obtain independent repair estimates from reputable mechanics, contractors, or other professionals. Comparing these estimates to the insurer’s can help show where the discrepancy lies.
4. Hire an Independent Appraiser: Many insurance policies have provisions that allow the policyholder to hire an independent appraiser to evaluate the damages. If you disagree with the insurer’s assessment, consider hiring an appraiser to provide a third-party evaluation of the damages. This appraisal can be presented as evidence in negotiations.
5. Submit Additional Evidence: If you have any additional evidence to support your claim—such as photos of the damage, repair bills, or expert opinions—provide these to the insurer. The more documentation you have, the stronger your case will be.
6. Negotiate with the Insurer: After gathering your evidence and independent estimates, you can begin negotiating with the insurer. Present the new information to the claims adjuster and ask for a reassessment of the damages. Be polite but firm in advocating for a fair settlement.
7. File a Complaint with the Insurance Regulator: If negotiations with the insurer do not lead to a satisfactory resolution, you can file a complaint with your state’s insurance regulator or commissioner. They may investigate the insurer’s practices and mediate the dispute.
8. Seek Legal Action for Bad Faith: If you suspect that the insurer is acting in bad faith—such as offering an unreasonably low settlement or refusing to fairly assess damages—you may have grounds to file a lawsuit. Consult with an attorney specializing in insurance law to explore legal options, including a potential bad faith claim.
9. Consider Mediation or Arbitration: If direct negotiations fail, some policies provide the option of mediation or arbitration to resolve disputes. These alternative dispute resolution methods involve a neutral third party who helps facilitate a fair resolution.

Legal Protections and Consumer Rights

1. Duty of Good Faith and Fair Dealing: Insurers are legally required to handle claims in good faith and deal fairly with policyholders. If an insurer undervalues the damages without a valid reason, they may be in violation of this duty, which could provide grounds for legal action.
2. State Insurance Regulations: Many states have laws protecting consumers from unfair insurance practices. If an insurer’s valuation process is deemed to be unreasonable or discriminatory, regulatory agencies may intervene to ensure compliance with consumer protection laws.
3. Underinsurance and Underpayment: If the insurer refuses to pay the full amount needed for repairs or damages, and it is found that the damage was caused by an event covered by the policy, the insurer could be held accountable for failing to honor the terms of the agreement. Policyholders may be entitled to seek additional compensation.

Example

Imagine you are involved in a car accident and your insurance company offers a settlement for repairs that seems too low based on your mechanic’s assessment. Here’s what you could do:

• Review the policy to check for coverage limits and any clauses related to the insurer’s valuation process.
• Request a detailed explanation of how the insurer determined the value of the damages.
• Get multiple independent repair estimates from mechanics or body shops.
• If you are still not satisfied, hire an independent appraiser to assess the damage.
• Submit the new estimates and evidence to the insurer and begin negotiating for a higher settlement.
• If the insurer refuses to adjust, file a complaint with the state insurance commissioner or consider taking legal action if bad faith is suspected.