When the settlement offer is too low

Where a low number comes from

An adjuster's first figure comes from an estimate or a valuation, and both are built from choices. Find the choice you disagree with and you have something concrete to argue about.

• Repair estimates: a different hourly labor rate, fewer labor hours, used or aftermarket parts in place of new ones, or no allowance for paint blending, materials or recalibrating driver-assist sensors.
• Hidden damage: the first estimate covers what is visible. Shops often find more after taking the car apart and send a supplement, which the insurer reviews separately.
• Total losses: comparable cars with a lower trim, higher mileage or from far away, or a large condition deduction. Our page on disputing a total loss valuation covers these.
• Other costs left out: towing, storage, a rental car or personal items in the car that your coverage or the other driver's liability should pay.

A low offer on an injury claim is a different problem. Medical bills, future care and lost income are harder to value, and a release you sign can end the whole claim, so talk to a licensed attorney in your state before you accept one.

The rules behind a fair offer

Most states' unfair claims laws follow the NAIC's model act, which lists as unfair practices not trying in good faith to settle a claim fairly once liability is reasonably clear, and compelling people to sue by offering substantially less than they ultimately recover. The NAIC model regulation adds rules for car repairs:

• You get the estimate. When the insurer settles a partial loss on its own estimate, it must give you a copy.
• Your shop's higher estimate. If your shop's estimate is higher, the insurer must pay the difference or name at least one shop that will do the repair for its estimate.
• No long drives. The insurer can't make you travel an unreasonable distance for an estimate or a repair.
• Undisputed money is paid. Once the insurer accepts liability, an amount that is settled and not disputed is due within 30 days.

States write these in their own words. New Hampshire, for example, requires an insurer that pays on its own appraisal to name a conveniently located shop willing to do the work for that price; if it can't, it pays the extra cost above its appraisal. See your state's page in claim rules by state.

How to build a counteroffer

1. Get the insurer's numbers in writing: the full estimate with labor rates and part types, or the full valuation report on a total loss.
2. Get your own: a written estimate from a shop you choose, or listings and dealer quotes for cars like yours.
3. Compare line by line. Mark every line where the two differ and note why: a missing part, a different rate, fewer hours.
4. Gather proof for each difference: the shop's posted rate, the manufacturer's repair procedure, receipts for recent tires or upgrades, photos.
5. Send a written counteroffer that gives your figure, lists each difference with its proof, and asks for a written answer on each line by a set date.
6. Ask for a supervisor if the adjuster won't respond to the specific points.

Taking part of the money now

If the insurer agrees on some items and not others, the agreed part doesn't have to wait. Under the NAIC model, an amount that is determined and not in dispute is paid within 30 days of the insurer affirming liability. Ask for that payment in writing while you keep negotiating the rest.

Read anything you are asked to sign. A check or a form marked as a full and final release can end the claim, including parts you meant to keep open. If you only mean to settle the car, make sure the release says so and doesn't cover injuries.

When talks stall

Keep an eye on the time limit to sue while you negotiate. It is on your state's page, and talking to an adjuster doesn't stop it.

Questions people ask