How do I handle insurance company undervaluing car? I want to avoid total loss classification.

UPDATED: Sep 30, 2022

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How do I handle insurance company undervaluing car? I want to avoid total loss classification.

The at-fault driver’s insurance came back with a valuation that triggers automatic total loss and is offering a payout that is lower than what I think is appropriate. If a higher valuation was used, car would not be declared total loss and could be repaired. Small Claims limit in my area is 7,500. By accepting the final offer payout, do I forfeit the chance to go to Small Claims for the difference? Are my options either to accept the payout and move on or reject the offer and have to go to ‘real’ court to sue for the whole amount b/c it would be over 7,500?

Asked on September 12, 2016 under Accident Law, North Carolina


SJZ, Member, New York Bar / FreeAdvice Contributing Attorney

Answered 6 years ago | Contributor

Unfortunately, you have adequately summarized your options: you can accept their offer, but if you do, it is final: you cannot thereafter sue to get more money. Or you can reject the offer and sue the insurer in "real" court based on breach of contract--for not properly honoring their obligations under the policy. To prevail, you'd have to prove by a preponderance of the evidence that their valuation is too low. As a practical matter, to do that, you'd have to have an expert witness--a car appraiser; an insurance adjuster; possibly a very experienced salesman for this type of car--testify as to the value; a court will not accept your layperson testimony as to value. Since you'd presumably have to pay the expert for his/her time, which can easily by hundreds, possibly thousands, of dollars, it may not be worth doing this.

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