Auto Insurance Claims: Totalled vehicle settlement dispute, state insurance department, appraisal clause

Question
My parents were recently involved in an incident where their car was caught in flood waters and was a total loss. They had purchased the car used (2 years old) just 5-6 weeks previously. The insurance company agreed to pay, but offered a settlement that was $2500 less than the blue book value and the price of similar cars for sale in the area. The dealership where they purchased the car agreed to talk to the insurance co. to explain the price, but the insurance co. refused. When asked how they derived at the settlement value, the insurance co. simply told them they had 10 days to agree to the price or they were going to turn the car back over to them.

Short of going to court and suing, what recourse do my parents have? The insurance company refuses to even talk to them.

Answer
Hi Jeff,

Your parents should file a complaint with your state insurance department. They should also demand that the insurance company provide them with what ever docummentation the company used to determine the value. Then they can check it for errors.  If the claims adjuster is not cooperative, they should ask to speak to a supervisor or manager.  They could also invoke the appraisal clause of their policy. This is where both sides hire a professional appraiser then the appraisers try to come to an agreement and if unable to do so they would select an umpire appraiser. Then an agreement reached by 2 of the 3 would be final and binding on all parties

I hope this helps
Richard Hixenbaugh