That is SOP. The shop will have to apply for a "supplement" Sometimes they apply 2 even three times depending on the unseen damage.

 

Is it ok to send them a letter stating that my estimates should have enough evidence for the insurance to issue me a supplement even after they told me I have to bring it to the shop? Will they drop me out of my insurance for doing this?

 

What this does is keep you from pocketing the check. They lowball you and then make the shop apply for the difference.

 

Yup, exactly.! But I'm still fixing my car regardless, just a fancier way of fixing it

 

I do homeowners insurance but I have a few questions.
What does the estimate entail? Are they paying for dent repair or new hood etc. u could pay the difference to upgrade and then have the shop supplement for the price difference in the other repairs if there is one. Insurance normally does not negotiate on the settlement until u actually chose a shop because of u don't commit they will have to negotiate multiple times and they may end up overpaying if they negotiate a higher one and then u find someone cheap to do it or don't do it at all. I don't do auto but that's my opinion

 

They're paying for the dent removal. Isn't it by law they have to pay for the average price of repairing it? Since I have a few estimates and they're all show a huge differences compare to the insurance estimate.

 

They have the right to pay based off the pricing that they can get the work done for. It's in the loss settlement portion of your policy. This section basically discusses how payments are made or negotiated. They have the option to pay based off of competitive pricing, their estimate, your estimate, the lowest cost as provided by a party in their network. Your state may have special provisions which effect this.
I would also like to state that I am not an auto adjuster and am just going based off of my understanding looking at that section of the policy for my insurance company which is not the one I work for.
You do have options such as appraisal in your policy but I can't advise you on if that's a good option or not as I don't do auto and if I did don't think I'm allowed to lol. But check out that section it may help

 

I would drop that insurance company and find a better company to do business with, sounds like you have Allstate insurance.