Limits of what insurance company pays

UPDATED: Oct 2, 2022

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Limits of what insurance company pays

My car was sitting in driveway, not running. Car driving by has a wheel come off their car and strike my parked car. Insurance company says my car is totaled and is offering an amount $2500 less than the blue book value. They say the driver’s policy only pays up to $5000 for this type of accident. Is this right? Do I just have to eat the big loss of value?

Asked on November 1, 2019 under Accident Law, New Jersey


S.L,. Member, California Bar / FreeAdvice Contributing Attorney

Answered 3 years ago | Contributor

When a car is totaled, the insurance company will never pay blue book value. Totaled to an insurance company means that the cost of repairs is more than the value of the car even if the car does not have major damage.
The policy limit of $5000 is the maximum the insurance could pay.
When settlement offers are unsatisfactory, your only recourse is to reject the settlement offers and file a lawsuit for negligence against the at-fault party. If the tire fell off because of negligence by a tire store, you would name that store in addition to the driver as defendants in your lawsuit for negligence.

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