My Insurance Company Is Lowballing Me — What Can I Do?

Your insurer accepted the claim. They sent an adjuster. They wrote an estimate. And the number is absurdly low. Maybe it covers half the repairs. Maybe it ignores entire rooms. Maybe the depreciation is so aggressive that your five-year-old roof is valued at zero. This is lowballing — and it is one of the most common ways insurers underpay claims.

Here is what you can do about it.

Recognize the Pattern

Lowball offers share common characteristics. Learn to spot them:

• Scope too narrow: The estimate only covers part of the damage. Affected areas are excluded. Related damage is ignored. Items that need replacement are listed for repair only.
• Unit prices too low: The estimate uses labor rates and material costs that no contractor in your area would accept. Xactimate prices set to the wrong zip code or adjusted below market.
• Excessive depreciation: Items are depreciated far beyond reasonable useful life expectations. A 10-year roof on a 30-year shingle is depreciated to nothing.
• No overhead and profit:The estimate excludes the general contractor's overhead and profit (O&P) — typically 20 percent combined — even though the repairs require a GC to coordinate multiple trades.
• Code upgrades ignored: The estimate prices repairs to pre-loss condition without accounting for code requirements that apply when you pull a permit.

Get Your Own Estimate

You are not required to accept the insurer's estimate. You have the right to get your own estimate from a licensed contractor. In fact, this is exactly what you should do. Find a licensed general contractor familiar with insurance repair work. Ask them to inspect the damage and provide a written estimate covering the full scope of repairs needed to return your property to its pre-loss condition.

A good contractor estimate will show the gap between what the insurer offered and what the repairs actually cost. This is your evidence. This is your leverage. For guidance on reading the insurer's estimate, see our Xactimate estimate guide.

Negotiate in Writing

Never negotiate by phone only. Phone calls leave no record. The adjuster can say anything on the phone and later deny it. Put every communication in writing — email is fine. When you submit your contractor's estimate, include a cover letter that:

1. References your claim number and date of loss
2. States that you disagree with the insurer's estimate
3. Identifies specific items that are missing, underpriced, or improperly depreciated
4. Attaches your contractor's estimate as the basis for your disagreement
5. Requests a line-by-line response explaining any disputed items
6. Sets a reasonable deadline for their response (14 days)

For more on the negotiation process, see our detailed guide.

The Supplement Process

A "supplement" is a request to add items to the insurer's existing estimate. This is how most claims grow: the initial estimate misses items, and supplements are submitted as additional damage is discovered or as the scope becomes clearer during repairs. This is normal. Insurers expect supplements. Do not be shy about submitting them.

Submit supplements in writing with supporting documentation — photos, invoices, contractor assessments. Each supplement should identify the specific items being added and explain why they are necessary. For more on this process, see our guide on supplemental claims.

Overhead and Profit

One of the most common ways insurers reduce estimates is by excluding general contractor overhead and profit (O&P). This is the 10 percent overhead and 10 percent profit that a general contractor charges to manage a project involving multiple trades (roofer, plumber, electrician, painter, etc.).

Insurers often argue that O&P is not owed unless you actually hire a general contractor. But if your repairs require coordination of three or more trades — which most significant losses do — a general contractor is necessary, and O&P is a legitimate cost. California courts have recognized this. For the full analysis, see our article on overhead and profit.

Invoke Appraisal

If negotiation reaches a dead end on the amount of loss, most California homeowner policies include an "appraisal" clause. Appraisal is a binding process where each side selects an appraiser, the two appraisers select an umpire, and the panel determines the amount of loss. It is faster and cheaper than litigation, and it resolves amount disputes definitively.

Important: appraisal resolves amount disputes, not coverage disputes. If the insurer says the loss is not covered at all, appraisal does not help — you need an attorney. But if they agree it is covered and just will not pay enough, appraisal is a powerful tool. For more, see our appraisal guide.

When the Gap Signals Bad Faith

There is a difference between a reasonable disagreement and an unreasonable lowball. If the insurer's estimate is 50 percent of what three licensed contractors say the work costs, something is wrong. If the adjuster refuses to explain the discrepancy, ignores your documentation, or stops responding — that pattern may cross the line from "genuine dispute" into bad faith.

Bad faith exposes the insurer to damages far beyond the claim amount — emotional distress, punitive damages, and attorney fees. When an insurer's conduct becomes unreasonable, an attorney experienced in insurance bad faith litigation should evaluate the situation.

Document Everything

From the moment you realize the offer is too low, document everything:

• Save every email, letter, and written communication
• Log every phone call (date, time, who you spoke with, what was said)
• Keep copies of every estimate — theirs and yours
• Photograph all damage before repairs begin
• Save all invoices and receipts for repairs, temporary housing, and out-of-pocket costs
• Note every deadline the insurer misses

This documentation serves two purposes: it supports your claim for the full amount, and it builds the record you would need if the dispute escalates to a CDI complaint, appraisal, or litigation.

The Bottom Line

A lowball offer is a negotiating position, not a final determination. The insurer is not the judge of what your claim is worth — they are a party to a dispute with a financial interest in paying you less. You have the right to disagree, the right to your own evidence, and the right to push back through every available channel. Use them.

This article is for informational purposes only and does not constitute legal advice. Insurance policies and applicable law vary by state and by policy form. Consult with a licensed professional regarding your specific situation.