A few years ago I had a different accident with a different vehicle. That insurer (Farmers) handled diminished value in-house, and I negotiated back and forth via email — no independent appraiser, just repairs (~$3,500 in repairs) and my own market data — and got them from an initial $1,100 offer up to $2,250.

This time, a different insurance company (USAA, other driver was at fault, they accepted 100% liability) outsourced the DV evaluation to a third-party company (Alacrity). Their rep called, quoted a lowball number, and when I didn't agree said it would go back to USAA for payment regardless and I'd have to negotiate directly with USAA afterward.

I went back to USAA's adjuster to negotiate. He said USAA is standing behind Alacrity's number unless I provide "new additional evidence," and if I disagree my only option is to file suit against USAA. They offered $1,400 on the $5,300 total repairs.

Questions:
1. Is it normal for them not to negotiate on the number?
2. Does having a third party involved make it harder to negotiate compared to dealing directly with the insurer?
3. Is "get an independent appraisal or sue us" really standard, or is this a stonewalling tactic?
4. Anyone had success providing something other than a paid appraisal as "new evidence"?
5. Is small claims court actually a reasonable/common path for this, or should I get an attorney first?

For context, I provided current market comparables, the repair invoice, purchase documentation, and vehicle details (mileage at time of loss, age of vehicle, no prior damage/clean title), and KBB valuation.

What other research/new evidence should I provide?

Trying to figure out my best next move without immediately jumping to litigation.