Can car insurance companies deny a claim that is your maximum payout amount?

I got into an accident and the cost to repair my car is $300,000. The maximum amount for a claim on my policy is $300,000 as well. My insurance company denied my claim, and an agent said it was because companies will never pay out 100% of a claimable amount. They also want to mark my vehicle a total loss. Is this legal?

Answer
“The amounts listed on your insurance policy represent the maximum amounts that a car insurance company would pay out in the event of an accident or claim. This does not mean that you are entitled to the exact amount. Insurance carriers have adjusters who look into accidents and determine fault and inspect the damage done to the vehicle.
If a repair shop is estimating that the damage is worth $300,000, this could exceed your policy limits for a single accident. If your vehicle’s actual cash value is less than $300,000, you would only be entitled to that lesser amount. Both of these situations mean an insurance company can mark a vehicle as a total loss.
You may be able to negotiate with your insurance company to keep your vehicle. Typically, you’d receive a smaller payout and you’d need to register your vehicle as salvage.”
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Emily Maracle
Answered on Apr 21, 2021
Emily Maracle is a car insurance specialist living in New York. Originally from the Pacific Northwest, she has a degree in English Literature and a background in customer service. She enjoys cooking, gardening, and living sustainably. In the future, she can't wait to upgrade to a hybrid or electric car.
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