Are You Being Paid the Diminished Value of Your Car in Your Property Damage Claim After Your Auto Crash?
Most people don’t know how valuable the property damage portion of their claim is after an automobile accident. After such an accident, most states allow you to file a third-party claim against the responsible motorist and their car insurance company instead of having to file one with your insurer, although the law, and your insurance policy, may give you that option.
After an accident, you will want to seek all of the damages that the law allows you to collect. You may have requested an amount for your medical expenses and the wages that you lost when you were recovering from your injuries. However, if you did not request an amount for the diminished value of your damaged vehicle as well, you may not get everything you deserve, and you might not recover all of your losses. To give yourself the best chance at getting all of the compensation owed to you, you will want to hire an experienced car accident attorney to guide you through the filing of a diminished value claim.
Most people do not realize how complicated or valuable the property damage portion of their claim is after an automobile accident. Important decisions need to be made, like whether to file your claim with the negligent driver’s insurance company or your own. You also want to be certain to file a claim for all the types of compensation you may be entitled to. After all, you want to receive everything you deserve when you were not at fault in causing your crash. If you have not asked for the diminished value of your vehicle, you may not be getting everything you should. Let an experienced car accident attorney guide you through your property damage claim.
What Is a Diminished Value Claim?
Your vehicle can begin to lose value to prospective buyers or dealers just because it was in an accident. Even if you fully repair it, the value of it will still be less than if the vehicle has no accident history. You are entitled to compensation for this loss, and you can generally file a claim for the reduced value of your car as a result of the crash.
What’s more, the cost of repairing vehicles has escalated in recent years due to the delicate and expensive tech that today’s cars contain. Once inexpensive parts like windshields, bumpers, and side-view mirrors now cost thousands to repair and install because of sensors that assist with collision warning and lane departure. In fact, it takes far less damage, these days, to total a car. You will want to make sure you consult a car accident lawyer to ensure the insurance company doesn’t shortchange you on repair costs.
Requirements for a Diminished Value Claim
Your automobile must meet certain requirements to qualify you for diminished value compensation.
These requirements vary depending on your location:
- Value Before the Crash: Each state sets a minimum value that the car must have been worth before the crash to file a diminished value claim. Cars that have a lower value to begin with generally won’t see big drops in value.
- Value of the Repairs: Your vehicle must have required a certain amount in repairs as a result of the accident.
- Age of the Vehicle: Older cars and vehicles with higher mileage may not qualify for a diminished value claim as their values will typically be lower to begin with.
- Prior History: Your car must never have been previously declared a total loss, and it cannot have a salvage title.
- Date Since the Accident: The statute of limitations for diminished value claims varies from state to state.
How Do You Prove Your Diminished Value Claim?
The insurance company probably won’t offer to pay you for the diminished value of your car. You’ll need to ask. It also likely won’t pay you the full amount of your request at the outset. It will usually make a low-ball offer, and you will have to prove the true amount of your losses. To do so, your car accident lawyer may want to obtain a report from an experienced appraiser.
What Are the Types of Appraisals?
If you need to obtain an appraisal, you should understand the two types:
- True appraisal: With a true appraisal, the appraiser inspects your vehicle to determine the quality and extent of the repairs. This type of report can cost more money.
- Desktop appraisal: Here, the appraiser does not inspect the vehicle itself. Instead, the appraiser will obtain information about your car, like its make and model, year, and mileage. In determining the diminished value, the appraiser assumes that the mechanic correctly repaired your vehicle. This often results in a lower amount of assumed loss and, thus, compensation.
What to Look for in an Appraiser
Your appraisal report is only strong if a qualified professional prepared it, and you will need to do some due diligence with the help of your car accident attorney before selecting one, especially since a true appraisal can cost up to $200.
The appraiser you choose should:
- Be qualified and licensed to do business in your state
- Have no complaints from the Better Business Bureau on record
- Be a member of the National Association of Professional Appraisers or a similar recognized organization
How Do Insurance Companies Calculate the New Value of the Vehicle?
Most insurance companies use a calculation called the 17c Diminished Value Formula to determine the new value of a vehicle after an accident. This calculation was first established by a Georgia court in a case involving automobile insurance policies issued by State Farm. A 10 percent cap generally applies to the value as determined by Kelley Blue Book or the applicable National Automobile Dealers Association guide. After the insurance company calculates the 10 percent cap, they will use a multiplier between 0 and 1, depending on how severe the damage to your car is:
- Severe structural damage: 1.00
- Major damage: 0.75
- Moderate damage: 0.50
- Minor damage: 0.25
- No structural damage: 0.00
The mileage on your car can make a difference to these calculations too. Insurance companies will use another multiplier between 0 and 1.
- 0-19,999 miles: 1.00
- 20,000-39,999 miles: 0.80
- 40,000-59,999 miles: 0.60
- 60,000-79,999 miles: 0.40
- 80,000-99,000 miles: 0.20
- Over 100,000 miles: 0.00
This is, in most cases, the maximum amount that the insurer will pay, whether it is your own insurance company or the at-fault driver’s.
Filing Your Diminished Value Claim
Like with the other parts of your car accident claim, you must decide whether to file it with your own insurance company (assuming that you have appropriate coverage or live in a no-fault state) or the negligent driver’s insurance company. An advantage of the latter is that you will not have to bear any deductible or other out-of-pocket expenses. However, it could take longer for you to recover compensation.
Your own insurance company may resolve your claim more quickly, but you still may need a car accident lawyer to negotiate an appropriate settlement with its adjuster. In addition, you could have to pay the deductible amount that your policy specifies.
An experienced car accident attorney can assist you with these matters. Legal counsel will understand the importance of your motor vehicle accident property damage claim and will fight hard on your behalf to help to ensure that you receive all of the compensation that you deserve.
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