It can be frustrating to navigate the process of filing a car insurance claim, but you need to be prepared to understand some of the most common pitfalls. One major issue that impacts many people who have legitimate car insurance claims is trying to figure out how to recover depreciation on auto insurance claims. Most people are aware that their car depreciates in value as soon as it is driven off the lot and also over a period of time. This can often come into contention with the insurance company when you need to file a legal claim for your situation.
One of the most challenging aspects of recovering a depreciation claim has to do with how the insurance company typically approaches this process. You might find that you and the insurance carrier are on different pages about the perception of your injuries.
What Is Recoverable Depreciation?
Depreciation might also be referred to as a diminished value claim. You may be able to use this to recoup some losses after a car accident if your car is well beyond dents and scrapes. If your car has had repairs made to it but is much less valuable as a result of this experience going through the insurance process, you have a right to attempt to get compensation for this loss.
You would do this by opening a diminished value claim and this is your first step in how to recover depreciation on auto insurance claims. Diminished value claims help address the difference between your car's worth before the accident and after the accident. When you are involved in an accident caused by another person's negligence you would open a car insurance claim against that driver's policy. If you believe that the accident itself pushed down the car's value in the market, then you would also need to pursue a diminished value claim with their insurance company too. There are three primary kinds of diminished value claims.
Immediate Diminished Value
An immediate diminished value claim refers to those situations where the resale amount is calculated immediately after your vehicle has been involved in an accident but before it gets repaired. Since you are most likely going to get the damage repaired on your vehicle, this kind of claim is rarely used but is still an option.
Repair Related Diminished Value
If your mechanic provides insufficient or improper repairs on your car or uses low-quality parts to make the repairs, you could initiate a claim for repair-related diminished value. The diminished value amount assumes that the vehicle cannot be brought back to its initial condition. One common way that this comes up is when you own a luxury car, you will need to be very careful that the mechanic uses exact parts from the maker of that car to replace damages. Otherwise using generic parts can significantly diminish the value of your vehicle.
Inherent Diminished Value
This claim refers to the car's market value after it has been repaired following an accident. Even if the mechanic has done an excellent job making these repairs, it is unlikely that your car will be good as new because the presence of an accident in its history makes the car's worth lower for potential buyers. This is the most common kind of diminished value claim out there and has prominent implications today because many people run reports to learn as much as possible about the accident history of a vehicle.