Recovering the Shortfall When Your Insurer Pays Only Part

Attorney Answer

Your own insurer's decision not to chase the other side does not end your claim. You can pursue the uncovered balance yourself against the at-fault driver's insurer.

Two different things can be happening, and it is worth separating them. Your insurer may have paid what your own policy owed and simply declined to pursue the other side. Or the at-fault driver's insurer may be refusing to pay the difference to you directly. The regulations address both.

On your own insurer's side, Cal. Code Regs. tit. 10, § 2695.7(p) requires every insurer to give a first-party claimant written notification of whether it intends to pursue subrogation of the claim. Where an insurer elects not to pursue subrogation, or discontinues it, that notification must include a statement that any recovery to be pursued is the responsibility of the first party claimant. In plain terms: if your insurer is not going after the other side, it has to tell you so in writing, and it has to tell you that the recovery is now yours to chase. Under § 2695.7(q), an insurer that does make a subrogation demand must include your deductible in every demand, and must share subrogation recoveries proportionately with you unless you have already recovered the whole deductible.

On the other driver's insurer, you can present the shortfall as your own claim. Under Cal. Code Regs. tit. 10, § 2695.7(b), an insurer has 40 calendar days after receiving proof of claim to accept or deny in whole or in part, and under § 2695.7(b)(1) an insurer that denies a third-party claim or disputes liability or damages must do so in writing. If it needs more time, § 2695.7(c)(1) requires written notice within the 40 days and then every 30 calendar days until it decides. Section 2695.7(d) requires a thorough, fair and objective investigation, and § 2695.7(g) prohibits a settlement offer that is unreasonably low. If the car was a total loss, § 2695.8(b)(6) applies the subdivision (b) valuation standards to third-party total loss claims, and any adjustment to the value of a comparable automobile must be discernible, measurable, itemized and specified as well as appropriate in dollar amount.

What you are owed is set by Cal. Civ. Code § 3333: "For the breach of an obligation not arising from contract, the measure of damages, except where otherwise expressly provided by this Code, is the amount which will compensate for all the detriment proximately caused thereby, whether it could have been anticipated or not." That is broader than the repair invoice. It is the authority for the deductible, for towing and storage you paid, and for loss of use while the car was unavailable.

What you can do

1. Ask your own insurer, in writing, for its subrogation notification under Cal. Code Regs. tit. 10, § 2695.7(p) — whether it is pursuing the other side, and if not, written confirmation that the recovery is yours to pursue.

2. Ask it in the same letter for the claim file: the valuation or estimate it used, what it paid, and why it paid that amount.

3. Open your own written claim with the at-fault driver's insurer for the difference, and attach the estimates, the payment letter and your receipts.

4. Keep a running list of what the shortfall actually cost you — the deductible, towing, storage, a rental, and the days you were without the car.

5. File a complaint with the California Department of Insurance if either insurer stops responding; under Cal. Code Regs. tit. 10, § 2695.5(a) a licensee has 21 calendar days to furnish the Department a complete written response, and under § 2695.5(b) 15 calendar days to respond to you.

6. Ask a local attorney whether it is worth pursuing the at-fault driver personally for anything the insurer will not pay. Most lawyers offer a brief initial call at no cost, and a few minutes on your specific facts with someone who handles these cases in your area is worth more than any general guidance, including this page.

⏱ Time limits apply. A claim for damage to a vehicle runs on Cal. Code Civ. Proc. § 338(c)(1), which sets three years for an action for injuring goods or chattels. If anyone was injured in the collision, Cal. Code Civ. Proc. § 335.1's two-year period for personal injury is shorter and governs that part. When each period started depends on your facts. Have a local attorney confirm the dates rather than counting from this page.