Can an Insurance Company Adjust the Settlement Based on Miscalculated Mileage After Picking Up a Totaled Car?

Many drivers may wonder if an insurance company can make changes to the settlement amount after picking up a totaled car when the initial quote was based on incorrect or assumed mileage. This article aims to clarify the situation and provide guidance on what drivers should expect and how to handle such disputes.

Understanding the Initial Settlement

The first step in understanding the process is to comprehend the initial settlement. When an insurance company evaluates a claim for a totaled vehicle, they consider various factors, including the current market value of the car, the cost to repair, and the historical or estimated mileage of the vehicle. While mileage is just one of the factors, it can significantly impact the settlement amount.

If the insurance company initially estimates the settlement based on assumed or inaccurate mileage, this can lead to an incorrect valuation. For example, if the policyholder mistakenly reports a lower mileage than the actual figure, the insurance company might value the car at a higher amount, as higher mileage typically results in a lower appraised value. Conversely, if the actual mileage is higher than reported, the settlement may be adjusted downward.

Scope of the Insurance Company's Adjustments

The insurance company has the right to adjust the settlement if they uncover inaccuracies in the reported information, including mileage. However, this adjustment should be based on verifiable and accurate information. If the policyholder subsequently contacts the insurance company with the correct information, the company must revise the settlement based on the correct data.

For instance, if the policyholder initially reports a mileage of 50,000 but the actual mileage is 70,000, the insurance company can and will adjust the settlement. This adjustment is reasonable and fair based on the principle that the vehicle's market value should reflect its accurate condition, including its true mileage.

Steps to Ensure Fair Settlement

To ensure a fair and accurate settlement, policyholders should take the following steps:

Review the Settlement Offer Carefully: One of the first steps should be to review the settlement offer carefully. Verify all information provided, including the mileage. If any inaccuracies are noticed, it is essential to report these to the insurance company immediately. Obtain Proof of Your Claims: Keep records of all communication with the insurance company, including emails, letters, and phone calls. Additionally, obtain proof of your claims, such as receipts, mileage readings, or vehicle history reports. This documentation can be crucial in supporting your case if a dispute arises. Request a Reevaluation: If you believe the initial assessment is incorrect due to the mileage or other factors, request a reevaluation. The insurance company should conduct a new assessment based on accurate information. Consider Professional Representation: If the dispute is significant and you feel that the company is not providing a fair settlement, consider seeking professional representation. An insurance claim specialist or attorney can provide valuable guidance and help you navigate the process.

Cost Considerations and Legal Actions

While an insurance company can adjust the settlement based on accurate information, this doesn't mean that you shouldn't pursue a fair outcome. However, there are several key factors to consider before taking legal action or pursuing other forms of redress.

First, it is essential to weigh the potential cost of the legal or administrative process against the amount in question. If the difference in the settlement is minor, it may not be worth the time and expense of a lawyer or court. However, if the difference is significant, you may want to pursue a claim.

Secondly, consider the complexity of your case. If the dispute is straightforward and clear-cut, you may be able to resolve it through informal means. However, if the case is complex or involves multiple parties, professional representation may be necessary.

Conclusion

The ability of an insurance company to adjust the settlement based on incorrect mileage is part of the standard process. However, it is crucial for policyholders to maintain accurate information and document their claims carefully. By taking these steps, you can ensure that you receive a fair settlement and avoid unnecessary disputes.

Should you find yourself in a situation where the insurance company has consistently failed to provide a fair settlement, consider seeking professional guidance. Remember, while the insurance company has the right to adjust the settlement, they also have the responsibility to handle claims fairly.