Many different expenses may pop up in the aftermath of a serious car accident, but you also need to be worried about the possibility of valuing your vehicle. There are so many different expenses to be totaled, including your missed wages and your medical bills, but understanding how to value a car after an accident can be very important for ensuring that you get maximum compensation for your vehicle's value.
This is one of the most contested aspects of filing an insurance claim, and therefore it is powerful to educate yourself about how to value a car after an accident so that you can make an informed decision when you believe the insurance company is not properly handling the situation.
Determining Too Much Damage
In some cases, your car may not be salvageable. Your insurance company will begin the investigation after an accident in order to label the damage on their own, and it may be different than what you have personally labeled the damage. This can be one of the most difficult aspects of how to value a car after a car accident. You'll need to read through the details submitted by the insurance company so that you can get on the same page as them. For example, if the insurance company made an evaluation on the vehicle that they label it as rebuilt or salvage, either of these factors could have significant implications for reducing your car's value. Having a rebuilt or salvaged car means that your vehicle was damaged to the point that it would have cost even more than the car was worth to go through fixing it.
This means that you will be without a vehicle and may not necessarily have the funds to get a new car. This can be a very frustrating experience for anyone who has gone through an accident, and you need to read through what an insurance company has said so that you can conduct your own investigation on how to value a car after an accident. The impact of the accident can also make it more difficult for you to sell your car. This is because buyers today are savvier than ever and look at websites like AutoCheck or CarFax to review the history of a vehicle.
The accident will usually show up on these sites and potential buyers can be concerned by accident histories. This is usually because vehicles need repairs or even significant repairs after a crash. This makes the pool of potential buyers of your vehicle much smaller, especially since there's no way for these prospective buyers to know how repairs were made or what repairs were made, how much damage was done or the skills of the mechanic who serviced the vehicle. This is especially problematic in the event that the insurance company labels your car as being a rebuilt title or a salvaged title because those cars are classified as not being worth much prior to the accident and have been very seriously damaged. Anytime that the demand for your vehicle goes down, as will happen if you have a rebuilt or a salvaged title on the car, the value of the car goes down too. Even in the event that your car was not rebuilt or salvaged, then the biggest challenge is understanding how much damage occurred. A major decision in determining the car value after an accident is whether or not you have it repaired. If your vehicle has not been repaired and still has damage from the accident, it will be worth less than what it otherwise would be.
Most buyers want to look for a used car that has a few issues as possible and do not want to discover after the fact that the vehicle they bought has much more problems than they expected. However, anyone who has been in an accident should expect some level of decreased valuation in their vehicle simply by being in an accident. It is very important to discuss the specifics of your accident with your personal injury attorney. Many people find it difficult to work directly with the insurance company and to get on the same page as them following a vehicle accident, but it is also especially important that you do this to protect your best interests. In all of these circumstances, you will want to have a conversation with a dedicated personal injury lawyer about any of the questions that you have surrounding the recovery of compensation, including how to value your car after an accident.
Car Depreciation and the 17(C) Diminished Value Formula
One of the most important things to know about how to value your car after a car accident is car depreciation. This frequently comes up in connection to the 17(c) diminished value formula. This will give you a relatively close estimate of how much your car's value has depreciated following the crash. This is a formula used by insurance companies to identify the total value of a vehicle after it has been involved in an accident, and this is primarily used by adjusters to determine whether or not it makes any sense to try to repair the car because it gives a good baseline of what the vehicle might still be worth after all of the damage. This formula takes into account the base loss of value, which is calculated at 10% of the vehicle's blue book value, times a damage modifier, multiplied by a mileage modifier.
There are several different steps included in this process, and you can come up with a reasonable estimate to compare against the insurance company by taking them. First of all, determine your car's vehicle value prior to the accident. You can use Kelly Blue Book or similar sources to identify a reasonable value. The second step is to calculate the 10% cap immediately placed on the car's value since most insurance companies will set a payout at a maximum of 10% of the car's value regardless of the damage done in the accident. You will then multiply the number that you achieved from that second step by what is known as the damage modifier.
This is one of the most contentious aspects in determining a car's value after a vehicle accident. This is because the insurance company will set one of four different damage modifiers with no structural damage that is 0.0, minor structural damage is 0.25, moderate structural damage is 0.5, and major structural damage is 0.75. At that point, you will then multiply this times the mileage modifier. You will multiply in the following way:
- for between 0 and 19999 miles on the car
- 0.8 for between 20000 and 39999 miles
- 0.6 for between 44000 and 59999 miles
- 0.4 for between 60000 and 79999 miles
- 0.2 for between 80000 and 99999 miles
- for having over 100000 miles on the vehicle
Once you calculate all of these numbers together, you will have a decent baseline of how to value a car after an accident.
If your numbers are drastically different from what the insurance company has presented to you, you may share this with your experienced personal injury lawyer to discuss your next steps and to determine whether or not you should fight back against the numbers that they have arrived at. Bear in mind that it is very difficult to fight back against the insurance company and that you will want to have a personal injury lawyer at your side to assist you.