Disputing an Insurance Claim Settlement

Find out how to dispute an auto insurance claim settlement through claims adjustors, independent reviews, and legal means to avoid an inadequate settlement.

If you file an auto insurance claim and, in return, receive an inadequate settlement offer, you can dispute the auto claim settlement with your insurance company. If that doesn’t work you can move up the chain, get an independent review, or even take legal action.

Getting a Fair Settlement

The chances of your insurer offering you the maximum settlement for anything are next to zero. That doesn’t mean your settlement will be unfair, however if you feel it is, you should take action. Typically your insurer will have wiggle room and will be able to adjust your claim without a lot of fuss, of course insurers are for profit companies so in some cases it will make sense to explore further external options. On this page, we will look at the process of disputing an auto insurance claim settlement, the various options you have, and the pros and cons of each.

Options For Disputing an Auto Insurance Claim

If you want to dispute your auto insurance company’s settlement offer on you claim, you have many options – communicating with the company, getting an independent appraisal, pursuing mediation or arbitration, and taking your insurer to court.
Many of the options for disputing an auto insurance claim involve hiring third-parties.  The whole process can be expensive, time consuming, and aggravating.

What can you do if your insurer responds to your insurance claim with a settlement offer that you think is unfair?

Well, the good news is that you have a variety of options when it comes to disputing claims settlements.  However, the bad news is that, as you exhaust more and more options, the remaining choices become more difficult, time-consuming, expensive, and aggravating.  Be sure that you know what you’re getting into and be sure to approach the settlement disputing process with a clear head; remaining firm, calm, and agreeable while working in what can be a very frustrating system can only help your case.

Working with your Insurance Company:

The initial first steps in disputing a claim are fairly painless; speak with your claim adjustor.  Clearly tell your claims adjustor that you’re unhappy with the settlement amount and explain why.  In most cases, claim adjustors have some wiggle room in the specific amounts of the settlement.  However, because insurance companies or for-profit entities, adjustors will naturally make a first offer at the low end of the range.

If this fails, you may want to speak with your claim adjustor’s supervisor.  When doing so, be sure to provide detailed written documentation that lays out your case as persuasively as possible.

Working Against your Insurance Agency:

After these initial step in which you’re working with your insurance agency, the remaining options involve working against your insurer.  These steps are generally more expensive, more time-consuming, and involve getting help from independent third parties.

The next step is to get an independent appraisal and put together a legal case.  In this step, you’ll want to hire an independent, third-party appraiser to analyze the damage to your vehicle or property (if applicable).  This appraisal, if it agrees with your argument, will greatly strengthen your case.  Furthermore, you’ll want to hire a lawyer – preferably one with significant experience in auto insurance claims – to help you put together a legal case against the company.

Before taking further legal action, you should send your appraisal and written documentation of the reasoning behind your case to your insurance company one last time; often, if you have strong evidence to support your argument, the insurance company is likely to adjust your settlement offer without furthering the conflict.

Taking Legal Action:

Your final options all involve taking legal action against your insurer.  These steps will all be costly and difficult.  The entire tone underlying such legal action will be inherently adversarial.  The three options are:

  1. Mediation — Mediation is a non-binding form of discussion between you and your insurer that’s moderated by an independent third party.  Neither you nor the insurance company has to follow the recommendations of the mediator, but the act of mediation may help you come to a mutually agreeable settlement.
  2. Arbitration — Arbitration is a discussion between you and your insurer very much like mediation, except that both parties must abide by the rulings and decisions made by the arbitrator.  Because of the finality of arbitration results, it is highly recommended that you have an attorney present.
  3. Court — Rather than arbitration, you may decide to take your insurer to court (usually small claims court).  For this, you will definitely want an attorney to represent you.

For more information on the basics of disputing claims, we recommend reading the Department of Motor Vehicles guide on handling disputed auto insurance claims.