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What to Do If Your Auto Insurer Denies Your Claim

There’s a likelihood that all of us have to file a car insurance claim. As distressing as that sounds, having comprehensive insurance coverage in addition to standard collision can often make a bad situation go down easier. The vast majority of us will likely emerge on the other end of the experience with a little less cash in our pockets and a tidy sum of experience. But for some, the experience will have been a bad one.

This isn’t unique to any specific type of auto insurance company. A company that offers car insurance online is just as capable of delivering world-quality service as an insurance agency that still operates with in-person office visits and handshakes that seal the deal (after the ink has dried, of course). Cheap car insurance isn’t synonymous with bad service, either. So why do some people have bad experiences, while others come out okay? In a word, it’s knowing what to do and how to handle certain situations with an auto insurer that can make all the difference in the world. Here are a few tips on what to do if your insurance company denies your claim or fails to pay as much as they should, and you’re forced to file an official dispute.

  • Get another appraisal independently. Your insurance company will likely have preferred appraisers in your area that they have a working relationship with, and although this might be a good route to take when you’re first filing a claim, it’s important to get someone involved who doesn’t have a stake either way in the resolution of the dispute. Once the appraisal is complete, they’ll send a copy of their final estimation to both you and your insurance company.
  • In order to avoid actual arbitration, many auto insurance companies offer you the option of mediation. Essentially, this is one step below actual arbitration and, although your instincts might be telling you to go straight into arbitration, you should exhaust all of your resources prior to doing so. Arbitration can be far costlier to you because it’ll require you to hire an attorney to represent your case. Although mediation isn’t legally binding, it also doesn’t require you to hire an attorney and is a good way to resolve disputes.
  • If mediation doesn’t work, the next step is arbitration. In this case you will have to hire an attorney to represent you, and the case is presented to a third party arbiter whose final decision is legally binding.

If all else fails and the insurance company still doesn’t pay as per the decision of the arbiter, your last resort is to go to court. This is where things can start getting particularly expensive, especially for you since you’ll not only have to worry about attorney’s fees, but also costly court fees. In this case, weigh your options carefully. The last thing you want is to spend $5000 taking your auto insurer to court just to recoup an additional $3000.

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