How does my auto insurance provider determine the cost of repair?

October 11, 2012

Cost of Repairs

Photo Credit: Jan Tik (Creative Commons)

If you’re in a car accident and have to make a claim on your auto insurance policy to cover repairs, your insurance provider will refer you to a claims adjuster.

The claims adjuster’s job is to verify the loss and determine the cost to repair your car. He or she will refer to either the National Association of Automobile Dealers or the Kelley Blue Book for the depreciated value and will give you an estimate for the cost to repair your car based on that number.

You should think of the claims adjuster’s estimate as a benchmark for comparison, not as the final settlement for your claim. No reputable claims adjuster or insurance provider will expect you to sign an agreement accepting his or her estimate until you’ve had the opportunity to confirm the settlement will completely cover the cost of repairs.

At this point, the claims adjuster will insist that you get two or more estimates for the work to be done on the car. He or she wants to make sure the insurance provider is not paying an inflated bill for repairs.

Don’t be surprised if the claims adjuster opts for the lowest bid. You have the right the argue with the decision if you believe the repair estimate is too low based on what your mechanic has told you.

What if my car is totaled?

Your insurance provider has the responsibility to decide whether to pay for repairs or declare the claim a total loss and pay you its book value. Most auto insurance providers will not pay for repairs if they will cost more than the cash value assigned to the car.

If you have additional questions about how your insurance provider determines the cost to repair your car, contact Burkhart Agency. We’d be happy to help.

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