Appearance Allowance on Insurance Estimate? How to Dispute

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Auto insurance companies utilize appearance allowances to provide credit towards your estimate payment or deductible.  This is in exchange for omitting repairs for damage from the estimate on your vehicle. As convenient as it seems, an appearance allowance may not be the best choice for you and your car.

Do I have to accept an appearance allowance on my repair estimate?  An appearance allowance is optional, your agreement to it is not mandatory, and you must be advised of it before it is applied. If you agreed to the allowance earlier, you can have the adjuster correct the estimate and give you full credit for the damage. Appearance allowances are also negotiable.

As an auto damage adjuster I have written thousands of claims for large insurance companies, so I am very familiar with appearance allowances and how they are used.  Let me show you how they can be disadvantageous to your vehicle repairs, how they can be a financial loss, and how to dispute an appearance allowance.

How does an Appearance Allowance Work?

An insurance adjuster will usually apply an appearance allowance in the presence of minor damage that can be small enough not to notice, but repairing it would be expensive.  The adjuster will not usually tell you the real price of the more expensive repairs and will instead try to convince you to take the appearance allowance.

Auto damage adjusters are graded their ability to write the most “cost effective”  estimate. The lower their estimates, the better their chances of getting a raise or a bonus. Besides aftermarket and recycled part usage, some insurance companies even monitor how many appearance allowances their adjusters utilize, making this a requirement.

“ insurance companies can take advantage of customers with appearance allowances because the estimating and repair process can be complex and hard to understand ”

Eric West
Prior Damage Formula for Removed Parts from a Total Loss

Most consumers are not familiar with the auto damage estimating or body repair process.  Even if the adjuster reviews the estimate with you, it can still be difficult to interpret.  In fact, adjusters usually take a 3 month course just to learn how to write estimates. How can you be expected to understand an estimate within a few minutes during your inspection appointment?  It is because of this discrepancy that insurance companies and auto damage adjusters can take advantage of customers with appearance allowances because the estimating and repair process can be complex and hard to understand.

Reasons to Refuse an Appearance Allowance.

When An appearance allowance is used as an excuse to lower your deductible at the cost of a more expensive repair, then you should deny the allowance.  For instance, you have a fender that has a large scratch on it from an accident that extends into the bumper cover next to it by half an inch.

This tiny scratch in the bumper cover might be barely noticeable, so the adjuster will offer $100 towards your deductible to avoid repairing this scratch.  In reality the repair will cost at least $300 – $400. Remember the appearance allowance should take into consideration paint and labor times for the repair, not just the part price if a component has to be replaced.

If you are fine with the aforementioned scratch on your bumper, and avoid repairing it, then you can use the $300 – $400 intended for the bumper repair towards your deductible or pocket the difference.*  This way you are being fully reimbursed for the damage and are making your own choice on how to conduct your repairs.

If you are filing through the at fault driver’s policy, and do not have a deductible, then you can also deny the appearance allowance and pocket the repairs costs.*

One example of this involves a customer of mine who had their vehicle completely keyed. All painted panels were scratched including both headlights and taillights.  An appearance allowance was offered as these lamps had small but deep scratches in them. These scratches could be polished out partially where only upon close inspection would you see faint damage.  An allowance of $50 for each lamp was offered totalling to $200 towards their $1000 deductible.

The customer instead asked how much replacement would cost as they would not be happy with a partially repaired lamp. The cost was $1300 to have the headlights and taillights replaced.  I found out later from their body shop, that the customer did not replace these parts and paid only for the scratches to the painted panels. They were able to not only have their deductible covered but also walk away with $300 in their pocket from the claim.

When Should you Accept an Appearance Allowance?

There are situations where an appearance allowance will be more cost effective and convenient to you rather than a repair.  Let’s say that the bumper in the aforementioned scenario was damaged from a previous accident and the new scratch is overlapping prior damage.   In order to correctly repair the new scratch on the bumper, the prior damage will have to be painted over as well due to the repair process. Most of the time you cannot just paint one portion of a panel, it has to be completely coated to be sealed correctly.

In this case, repairing the new scratch would also repair the prior damage.  This would make the bumper better than it was before which is out of the scope of your insurance claim.  Insurance is supposed to only cover damages from the current loss and not restore your vehicle any further.    

Since the prior damage is not related to this accident, and if you insist on repairing the new damage, the prior damage repairs will be prorated towards your deductible as a “betterment” thereby increasing it.  The adjuster can then offer an appearance allowance for the scratch so you are at least reimbursed.

Can I Dispute an Appearance Allowance after the Fact?

Even if your estimate has been completed, and you realize the appearance allowance is not financially favorable later on, you can have the allowance removed.  Days, weeks and months can pass by, and you can still contact the adjuster and request a supplement. A supplement is an adjustment of an estimate due to a necessary correction such as the removal of an appearance allowance.

If the adjuster explained the appearance allowance at the time of inspection you can inform him you did not understand this concept or find it unfair.  You can ask to have the full price of the repairs added back to the estimate and restore the deductible.

If the adjuster did not explain the appearance allowance, and you find out from the body shop or from reviewing the estimate later, then you have an even better argument for removing the allowance.  Since adjusters are motivated by writing “cost effective” estimates, they may omit damages or assume a customer will be fine with an appearance allowance without asking them.

Point out this dishonest behavior to the adjuster and demand full reimbursement. If the adjuster is adversarial or is providing excuses to avoid making a correction to the estimate, then escalate this problem to his supervisor or beyond.  Here is a helpful article on how to have your demands met by your insurance company: How to Deal With an Auto Insurance Damage Adjuster – 8 Tactics.

Can I Negotiate an Appearance Allowance?

An appearance allowance is the adjuster’s calculation on how much the minor damage in question is worth.  Their calculations range from anywhere to an opinion or to an actual percentage of the repair cost. Remember adjusters are graded on writing cost effective estimates, so the first amount is almost always negotiable.

To Negotiate the Appearance Allowance, ask the Adjuster the Following Questions:

How did the adjuster come up with the amount?

If they have no calculation, then it will be easier to negotiate as this was an opinion, possibly low-ball offer.  If there is a calculation, then ask how it works and if there is a state statute endorsing this calculation. If not, then you can negotiate this higher.

How much is the repair cost instead of the appearance allowance?  

Let the adjuster know you will opt for the repair instead unless the allowance is increased.  If there is prior damage that can result in a betterment applied towards your deductible then go over the costs in detail.

Is the adjuster using recycled or aftermarket part prices in their calculations?

These parts can be cheaper by 50% or more than original equipment manufacturer parts (OEM). If so, have they confirmed those parts are available and are they of insurance quality or certified for insurance repairs?

Did the adjuster write for any partial repairs in conjunction with the appearance allowance.

How much did this increase estimate, and are they truly sufficient for a partial repair?

If you still feel the appearance allowance is unfair you can always ask to have your estimate reviewed by a supervisor or manager.

Final Thoughts.

Auto damage adjusters can give the appearance that an estimate is not negotiable. What they often do not explain is that body shops negotiate and dispute their estimates on a daily basis. Auto damage adjusters are forced to re-write and increase their estimates to the body shop’s demands and you, as the consumer, yield the same power.

Related Questions:

Can the adjuster take betterment on parts in my estimate? Adjusters can take betterment for parts on your car that have wear and tear on them when being replaced with a new part. This wear and tear is measured against the new part and then prorated against your estimate payment. Betterment can be negotiated and waived. Check out this article for how to negotiate a betterment.

* If you are still paying the loan on your vehicle, the finance company may require you repair the car according to the estimate. Check with your finance company before proceeding.