You can sue your car insurance company if they underpay on your total loss vehicle. Insurance companies are obligated to honor the terms of the insurance policy, and underpayment may constitute a breach of contract or bad faith. Here’s an overview:
STEPS BEFORE SUING
1.Review Your Policy:
Check the details of your insurance policy, particularly the section on total loss and valuation. Ensure you understand how the payout is calculated (e.g., actual cash value, replacement cost, etc.).
2.Negotiate:
If you believe the insurance company’s valuation is too low, you can:
•Provide evidence of your vehicle’s market value (e.g., recent comparable sales, appraisals, receipts for upgrades, etc.).
•Hire an independent appraiser.
3.File a Complaint:
If negotiations fail, consider filing a complaint with your state’s insurance regulator. This step can sometimes lead to a resolution without litigation.
GROUNDS FOR A LAWSUIT
1.Breach of Contract:
If the insurance company fails to pay what is owed under the policy, you can sue for breach of contract. You’ll need to prove:
•The insurance company failed to fulfill its obligations under the policy.
•The underpayment caused you financial harm.
2.Bad Faith:
If the insurance company acts unreasonably or unfairly in processing or settling your claim, you may have grounds for a bad faith lawsuit. Examples include:
•Deliberately undervaluing the claim.
•Ignoring evidence of higher value.
•Failing to communicate or investigate your claim properly.
3.Negligence or Fraud:
If the underpayment is due to negligence or intentional fraud, you might have additional legal claims.
POTENTIAL REMEDIES
•Compensatory Damages: To recover the difference between what you were paid and the proper value of your vehicle.
•Punitive Damages: If the insurance company acted in bad faith, punitive damages may apply to punish their misconduct.
•Attorney’s Fees: In some cases, courts may award attorney’s fees and costs.
OTHER CONSIDERATIONS
•Appraisal Clause: Many policies include an appraisal clause, which requires disputes over value to be resolved through arbitration rather than a lawsuit.
•Statute of Limitations: Ensure you file your lawsuit within your state’s statute of limitations for contract or insurance claims.
•Legal Advice: Consult an attorney specializing in insurance or consumer law to evaluate your case.
If you believe your insurer has acted unfairly or underpaid you, gathering documentation and consulting a qualified appraiser can help you pursue appropriate remedies.
The business model of all insurance companies is to charge as much as they can in premiums and to pay out as little as possible in claims. Keep this in mind when you receive the settlement offer for your total loss vehicle.
Additional fees you may incur are $275.00 for our representation in Appraisal Clause negotiations.
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Don T (California)- Thank you for your services. I am happy with the total loss valuation appraisal and feel the valuation to be true. When I drive to Tesla supercharger stations, none of the other Tesla’s stand out or is as nice as mine, and I get that comment all the time from Tesla and non-Tesla owners. It was my perfect dream car and is irreplaceable. You just can’t put a price tag on something like that. So it’s very insulting when Geico and CCC tries to value my car at such a ridiculous amount. So thank you for your great work and I will definitely be leaving you great reviews. Franklin was very helpful and extremely knowledgeable. He took his time to explain the process and what I would be expecting before I even hired him. I felt very comfortable working with him and couldn’t be more happy with his services. If you had a car that you loved and cherished and is irreplaceable, and you want to make sure it gets appraised at the right value even though you can’t put a price tag on it…then Franklin and The St. Lucie Appraisal Company is your go to appraiser. Thanks Franklin!
Gino B (Washington)- I know firsthand that if you are reading this testimonial – you’ve had some car problems (stolen, damaged, accident, etc.) You are probably in the right spot.
When my truck was stolen and recovered (with a lot of damage), my Insurance company (USAA), who I thought would be there for me when the chips were down made me a really low-ball offer. After some simple internet searches – it seems USAA has a habit of letting down their insurance customers.
I was pulling my hair out battling it out with USAA’s lowball offer until I found Franklin’s St. Lucie Appraisal team. Franklin quickly assisted me in understanding my rights, my options and provided expert advice and engaged with all parties as my representative in the appraisal process resulting in an award letter almost 3X higher than USAA’s initial low-ball offer. 3 TIMES HIGHER!
USAA initial offer was about $5K – Franklin was able to negotiate with other appraisers and get me a fair Actual Cash Value of $15K through the process. The juice is definitely worth the squeeze folks.
He was consistently available, professional, friendly, and considerate and took the time to understand my claim and help ensure I take the steps that were right for me. Before you go anywhere else – drop his team a line – you will be glad you did.
This is an Open Education Resource focused on automobile total losses, the appraisal clause, collective knowledge and the sharing of scholarly content.
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