Once a car has been involved in a collision, its value drops. Even after the vehicle is repaired, it’s usually worth considerably less than it was prior to the wreck.
This difference is called “diminished value,” and it can pose a headache for car accident victims. Thankfully, those who are familiar with the way insurance companies handle diminished value claims are often able to secure compensation for the additional loss.
How Do Insurance Companies Recognize Diminished Value?
1. Inherent Diminished Value
Following auto accidents, many property damage claims are based on the affected vehicle’s inherent diminished value. The most widely accepted form of this kind of loss, inherent diminished value refers to the drop in value that results because the car, truck, or SUV now has a history of damage. This decrease in value assumes the necessary repairs were performed correctly using the optimal parts.
2. Repair-Related Diminished Value
Repair-related diminished value encompasses the loss of value that results when a vehicle cannot be restored to its original condition. Slightly higher than inherent diminished value, it takes into account both the car’s history of damage and any subsequent low-quality repairs.
For example, if the mechanic had to use aftermarket parts because the manufacturer stopped producing the associated original parts, the car would have repair-related diminished value. Addressing cosmetic imperfections with paint that’s not a precise color match to the original is another common example of work that contributes to repair-related diminished value.
How Do You Seek Compensation for Diminished Value?
If your car sustained at least some structural damage or has fewer than 100,000 miles on the odometer, there’s a good chance you’re entitled to compensation for diminished value following a wreck. Before proceeding, however, consider who was to blame for the collision.
If you were wholly at fault, the insurance company will probably deny your diminished value claim. If someone else is liable, however, it’s worth making a claim with the at-fault parties insurance company.
To navigate the claims process regarding diminished value claims involves:
- Confirming the available insurance coverage and confirming the caps of your uninsured/underinsured coverage);
- Determining your vehicle’s value using a reliable source, like Kelley Blue Book, or N.A.D.A.;
- Photographing the structural damage prior to having it repaired;
- Preserving the mechanic’s invoices;
- Photographing the vehicle after the repair;
- Having the car appraised by a certified professional after it’s been repaired;
- Filing all associated paperwork with the insurance adjuster; and
- Negotiating for a satisfactory payout.
It’s important to note that the process for filing a diminished value claim, as well as—and the potential caps that might apply—vary by state.
This information is provided to you by Weiner, Spivey & Miller, PLC. Founded in 2000, our compassionate team possesses more than 190 years of collective legal experience in assisting the injured.
We will use all the resources at our disposal to build a strong claim on your behalf, and we will relentlessly pursue every dollar you deserve. Call 703-215-9982 or use our Online Contact Form to set up a free case review with a car accident lawyer in Fairfax.