What Happens If the Insurance Company Underestimates the Cost to Repair My Car?
If you’ve been involved in an accident and filed a claim with your insurance company, one of the key steps in the process is determining the cost to repair your vehicle. However, there are situations where the insurance company might underestimate the repair costs.
This can be frustrating and may leave you with insufficient funds to restore your vehicle to its pre-accident condition. So, what happens if the insurance company underestimates the cost to repair your car? Here is some guidance on your legal options in Colorado.
What Is Underestimation of Repair Costs?
An underestimation occurs when the insurance company offers a repair amount that is lower than the actual cost of fixing the damage to your car. This can happen for various reasons, including errors in the assessment, an attempt to minimize payout, or an inaccurate assessment of vehicle damage.
In many cases, insurance companies will hire an adjuster to assess the damage to your car and determine the amount they believe the repair will cost. However, this estimate might not always account for all necessary repairs, hidden damages, or the full cost of labor and parts.
How Can You Identify An Underestimation?
When you receive a repair estimate from your insurance company, you should carefully review it to ensure all aspects of the damage are covered.
Here are some signs of underestimation:
- The Estimate is Below Industry Standards: If the repair costs are significantly lower than what you know is typical for repairs in your area, this could be a sign of an underestimation.
- Missing or Incomplete Damage: Sometimes, certain damages may not be visible at first, especially in complex accidents. If the insurance adjuster fails to account for these damages, the estimate will be inaccurate.
- Low Labor Costs: Labor costs can vary, and an unusually low estimate may not include the true cost of the work required to repair your vehicle.
If you notice any of these red flags, it’s important to take steps to address the issue before accepting the insurance company’s offer.
What Can You Do If the Insurance Company Underestimates Your Repair Costs?
If you believe that the insurance company has underestimated the cost to repair your car, you have several options for addressing the issue.
Here’s what you can do:
1. Get Your Own Independent Estimate
One of the first steps you can take is to obtain an independent estimate from an auto repair shop of your choosing. When you do this, be sure to select a reputable repair facility that can provide a detailed estimate of the repairs required.
Having an independent estimate allows you to compare it with the insurance company’s assessment and present a stronger case if you need to challenge their offer. Under Colorado law, you have the right to choose where your vehicle is repaired and to get your own damage estimate if you disagree with the one provided by the insurance company.
2. Request a Re-Inspection by the Insurance Company
If you believe the initial estimate was inaccurate, you can request that the insurance company send an adjuster to inspect your vehicle again. Be sure to provide any additional evidence, such as photos, repair invoices, or expert opinions, to support your claim for a higher repair cost.
In Colorado, insurance companies must act in good faith, which means they must fairly assess your claim. If an error has occurred in the evaluation process, the company must make the necessary adjustments.
3. File a Complaint with the Colorado Division of Insurance
If the insurance company refuses to revise the estimate after a re-inspection or is causing unreasonable delays in the claims process, you have the right to file a complaint with the Colorado Division of Insurance. This state agency regulates insurance providers and investigates violations of fair claims handling practices. While it may not determine the specific value of your claim, the DOI can take action if the insurer is failing to comply with Colorado insurance laws or is acting in bad faith.
4. Negotiate with the Insurance Company
If you’ve obtained an independent estimate and the insurance company is still refusing to increase their offer, you can try to negotiate with them. Often, presenting detailed information, including property damage estimates, will encourage the insurance company to revise its initial offer.
Many car accident lawyers and legal professionals in Colorado have experience negotiating with insurance companies, so if you feel that the process is not moving forward fairly, consulting with a lawyer might be beneficial.
5. Legal Action
If all else fails and you cannot resolve the dispute over the underestimated repair costs, you may consider legal action. In Colorado, you have the right to pursue a bad faith insurance claim if you believe the insurance company is not fulfilling its obligations in a fair and reasonable manner.
A bad faith claim can be filed if the insurance company is not honoring its contractual duties, including offering a reasonable settlement based on the actual repair costs. In these cases, you may be entitled to additional compensation beyond just the cost of repairs, including damages for emotional distress or punitive damages.
What Compensation Can You Recover?
If you are successful in challenging the insurance company’s underestimation, you may recover compensation for:
- Full repair costs: The cost to repair your vehicle as per a fair and accurate estimate.
- Rental car costs: If you need a rental car while your car is being repaired, the insurance company may be required to cover the cost.
- Damages for inconvenience: In some cases, you may recover damages for the inconvenience caused by not having your car for an extended period.
In extreme cases, Colorado law may also allow for punitive damages if the insurance company’s conduct is deemed egregious or in bad faith.
Contact a Denver Personal Injury Lawyer for a Free Consultation
Dealing with an insurance company that underestimates the cost to repair your car can be frustrating, but you have rights under Colorado law to seek a fair settlement. If you believe the insurance company is acting in bad faith, consulting with a Denver personal injury lawyer from Zaner Law Personal Injury Lawyers can help you explore your legal options and take the next steps in seeking a resolution.
Contact one today at (720) 613-9706 for a free consultation.
