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Auto Insurance Claim With Diminished Value – Morgan & Morgan

How to Handle an Auto Insurance Claim With Diminished Value

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Auto Insurance Claim With Diminished Value

A car damaged in an accident, even after repair, is generally worth less than a comparable model that was never involved in a crash. The difference in worth is known as “diminished value”. Selling an accident vehicle can be challenging as potential buyers can easily check a vehicle’s accident history. Therefore, if you experienced an accident due to another party’s fault, you could qualify for a diminished value auto claim. 

If you got hurt in an accident that damaged your car, you could also receive damages in addition to diminished value, such as loss of income, medical bills, and others. However, getting your due from an insurer can be a challenge. Morgan & Morgan’s determined car attorneys can handle the insurance company on your behalf and fight for the settlement you deserve. Contact us now for free legal advice. 

Types of Diminished Value Claims

Even if your accident vehicle was repaired to the highest standards, its resale value would be lower, according to the Insurance Information Institute (III). Moreover, anyone looking to buy a used car can find out about a vehicle’s accident history online. If you are hoping to sell an accident vehicle, therefore, you could lose out financially unless you file a diminished value claim after an accident. There are three types of diminished value:

1. Inherent Diminished Value

Inherent diminished value refers to a vehicle’s loss of value simply due to accident damage. Inherent diminished value occurs despite a vehicle’s repairs being of high quality without any visible flaws. Inherent diminished value is the most frequent type of diminished value claim.

2. Repair-Related Diminished Value 

Sometimes, repair work fails to restore a car to its pre-accident condition. Inferior parts, bad color matching, or substandard workmanship can all diminish your car’s value, particularly if you own a luxury car. When repairing a high-end vehicle such as a Mercedes or Porsche, original manufacturer parts should be used. Using refurbished or generic car parts can diminish the value of a luxury car considerably. Antique cars can run into the same problem. Moreover, it could be impossible to find original parts when a classic car is wrecked in an accident. 

3. Immediate Diminished Value

Your car loses value instantly when involved in an accident. Immediate diminished value refers to the worth of your vehicle after an accident and before any repairs have taken place. Since most have their car repaired as soon as practical after an accident, immediate diminished value claims are uncommon.

How to File a Diminished Value Auto Claim

Once you have decided to file a diminished value claim, acting promptly can be advantageous. Gathering evidence that can help prove your accident claim is typically easier when done as soon as possible after the crash. If you wait too long, vital documents and evidence could disappear. Your car’s value could also drop further while you are waiting to file a claim. Your next best steps after an accident can include:  

Determining Who Is at Fault for the Accident

Insurance companies typically determine fault in an accident by examining the facts and circumstances. The more evidence you have gathered regarding another driver’s fault, the better for your case. Evidence can include:

  • Photographs of the accident scene
  • Witness statements
  • Police reports 

Communicating With the Insurance Company

You would typically file a diminished value claim with the at-fault party’s insurance company. Therefore, a good step can be contacting the insurance company to find out how to handle a diminished value claim. Ask the insurance company which information you should provide for the processing of your claim. It is important to note that if the at-fault driver in the accident was uninsured, you could file a diminished value claim with your own car insurance, provided you have uninsured motorist coverage. 

Calculating Diminished Value

Your car’s pre-accident value is determined based on its model, age, and mileage. Further information on how to assess your car’s value is available at the Kelley Blue Book (KBB) or the National Automobile Dealers Association’s (NADA) website. 

Most insurance companies use the 17c formula for calculating the diminished value, depending on the extent of your car’s accident damage and mileage. First, they will apply the ten percent cap to the value of your vehicle as estimated by NADA. Then, your car’s value is assessed using damage and mileage multipliers depending on the severity of damage and the number of miles on your car’s clock.

However, the 17c formula has flaws that could lead to too-low diminished value appraisals. If the insurance presents you with a calculated diminished value figure that seems inaccurate, consider a third-party damage assessment from a licensed appraiser. The third-party report can help negotiations with an insurance company.  

Filing the Diminished Value Claim

Ensure you follow the insurance company’s instructions for filing the diminished value claim and answer any questions and queries. If there is no response to your claim after a few weeks, contact the insurance company for updates. If the insurer is unresponsive or minimizes your claim, consider contacting an attorney for help as soon as possible. 

Do You Have a Diminished Value Claim?

You could have grounds for filing a diminished value claim if your car was significantly damaged in an accident, and:

  • You own or finance your car

AND

  • Another party is liable for your accident 

The at-fault driver’s insurance company is generally responsible for reimbursing you for any damages sustained in an accident, which can include the diminished value of your vehicle.  Having your car appraised by a professional can help with getting your due after an accident. Morgan & Morgan has access to investigators and experts that can assess your car’s damages. Our experienced car accident attorneys can walk you through the legal issues and help you file a diminished value claim.

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FAQ

Morgan & Morgan

  • Can I Always File a Diminished Value Claim After a Car Accident?

    Not everyone involved in a car accident can file a diminished value claim. You may not have a good claim if:

    • You are at fault for the accident
    • Your state’s laws make you ineligible for filing a claim
    • Your car is old or was already damaged before the accident
    • The at-fault driver was uninsured

    However, seeking legal assistance after an accident can provide clarification. A car accident lawyer can assess your accident and advise you on whether you qualify for a diminished value auto claim.

  • Can I Sell a Vehicle Without Disclosing Its Accident Damage?

    While it can be tempting to keep quiet about your car having been damaged in an accident, failing to disclose accident damage is unadvisable. Failure to disclose major accident damage to a private buyer or dealer could also be illegal, depending on state laws. Dealers are typically required to disclose to potential buyers that the car they are interested in purchasing was involved in a significant crash.

    Honesty is the best policy when it comes to selling an accident car. Consider also that potential buyers can find out online whether your vehicle was repaired after a crash on websites such as Carfax and AutoCheck. Among other information about your car, potential buyers could find details regarding your car’s: 

    • Structural damage
    • Total loss
    • Multiple owners
    • Airbag deployment
  • What Are My Next Best Steps After an Accident?

    A car can be replaced, but your health is irreplaceable. If your accident caused considerable damage to your vehicle, it is unlikely that your body is unaffected even if you felt fine immediately after the accident. Visiting a doctor promptly after an accident can be vital for diagnosing and treating any undetected injuries, giving you the best chance for a quick recovery.

    Other good steps to take at the accident scene and in the following days include:

    • Filing a police report regarding the accident
    • Taking pictures of the vehicles, injuries, and accident scene
    • Gathering the contact details of other drivers and eyewitnesses
    • Informing your car insurance of the accident and filing a claim
    • Contacting a car accident lawyer for help and advice
  • Which Other Damages Could I Qualify for After a Car Accident?

    If your car was extensively damaged, qualifying you for a diminished value claim, you could have other losses too. Significant car accidents can change lives and cause physical and emotional suffering as well as financial hardship to those affected. Unfortunately, it can be a struggle to get what you deserve from an insurance company. In some cases, you might have to file a lawsuit to pursue damages after a serious car crash. 

    If someone else is responsible for your crash, you could seek the following damages and others, depending on your case:

    • Lost income
    • Medical bills
    • Future lost earning potential
    • Future expected healthcare costs
    • Rehabilitation therapies
    • Medical devices
    • Repair or replacement the vehicle 
    • Physical and emotional anguish
    • Permanent disability
    • Disfigurement and scarring

    If a defendant maliciously or recklessly caused your accident, you could also receive punitive damages. However, punitive awards are relatively rare in car accident cases. 

  • Can I File a Diminished Value Claim After My Car Has Been Repaired?

    Filing a claim once your car has been repaired is generally the correct procedure for a diminished value claim. Once your repairs have been completed, contact the at-fault party insurance to present your claim. The insurance company will most likely require a complete list of all the repairs to your vehicle. 

  • Does My Car’s Age Affect a Diminished Value Auto Claim?

    If your car is older and racked up many miles, your diminished value will be lower than that of a brand-new vehicle with lower mileage. Moreover, it is generally easier to recover diminished value compensation for newer cars. While vehicles older than ten years still lose value after getting damaged in an accident, it can be more difficult to get your due from an insurance company or at court. 

    Filing a diminished value claim for an older car is possible and may be successful. However, the cost and time investment could outweigh the potential benefits as you may only be able to recover a relatively small amount. Before taking any action, you could speak to one of our experienced car accident attorneys for advice regarding your particular situation and vehicle.

  • Can I Handle a Diminished Value Case on My Own?

    Potentially, you could handle an insurance claim on your own. However, if your vehicle has lost a considerable amount of value after an accident and an insurance company is dragging its heels, having experienced legal representation can be advantageous. Our car accident attorneys know how to protect your legal rights and can negotiate aggressively with insurance companies. Ways in which Morgan & Morgan could help:

    • Determining whether you have a diminished value auto claim
    • Investigating your case fully
    • Determining all liable parties in your accident
    • Communicating and negotiating with the insurer
    • Gathering evidence proving your diminished value claim
    • Calculating the diminished value amount accurately

    If you or a loved one experienced a severe accident, the last thing you should worry about is handling yet more paperwork and formalities to get what you deserve. Our dedicated car accident attorneys can handle your diminished value claim while you can move on and get your life back on track. You do not have to pay a dime upfront when we handle your case, as we only get paid if you recover compensation. 

  • Contact Us Today for Help With a Diminished Value Claim

    A vehicle involved in a serious accident will always be more challenging to sell, whether you are trying to sell the car privately or are looking to trade in the vehicle. However, if someone else caused your accident carelessly or recklessly, they or their insurance company should pay for your losses, including the diminished value of your vehicle.

    Our car accident attorneys can leave no stone unturned in fighting for what you deserve. Get help and advice now by calling us at (877) 537-0246 or filling in our online form to schedule a free consultation.

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