Top 10 Things You Need to Know About a Diminished Value Claim
Every day over 15,000 automobile accidents happen on the highways and in the cities of the United States. If you are driving a luxury car such as a Maserati, Mercedes, or Porsche, your insurance company may refuse or reduce your claim because of the initial costs of repairs.
Once you have been in an accident and your car has been repaired, regardless of the original market value, it will drop in value. Sometimes this drop in value can be between 15% and 50% but usually averages out at about 20%. The difference between the market
value of the car without an accident and the value after repairs is known as diminished value. Here are some things you need to know about a diminished value claim:
In Florida, you are entitled to recover the diminished value of your vehicle. The Florida statutes state that a vehicle owner can pursue a diminished value claim from an at-fault driver or the driver’s insurance company. The Florida Supreme Court has also adopted a measure of damages in their jury instructions. But as the plaintiff, you carry the burden of proving the diminished value of your car after a car accident.
Florida drivers have a maximum of four years from the date of the accident to file a diminished value claim. It is crucial to have your vehicle inspected as soon as possible after the accident.
3. Market Value vs. Diminished Value
The market value of a vehicle is the price of the model, brand, year, and mileage. This is generally the Kelly Blue Book value of a car. This market value diminishes when a vehicle is involved in an accident. Even when it is repaired to pre-accident condition, the mere fact that it was in an accident reduces its value.
4. Your Car Will Lose Value If You Don’t Report the Accident
Technology and advancements in many body shops and car dealers enable them to know if work was performed on the vehicle, even if you think everything has been restored. If there is no accident report and you did not pursue damage through an insurance claim, your vehicle’s damage may still come to light when you sell it.
5. Types of Diminished Value Claims
There are three categories of diminished value on a vehicle involved in an accident:
Immediate diminished value is the loss of value at the scene of the accident and the claim adjustment by the insurance company to restore your car to its pre-accident condition.
Inherent diminished value is the loss of value from your car’s accident history, included in the CARFAX © history a potential buyer will receive.
Repair-related diminished value is the value lost from inferior parts and shoddy repairs. For high-end and classic car owners, this is especially important.
6. Calculate Diminished Value
Insurance companies and the claimants must calculate the diminished value of the vehicle using Formula 17C. This formula takes the actual cash value (ACV) of a vehicle, multiplied by a 10% cap to establish the base of loss of value. This figure is multiplied by a damage modifier, according to the level of damage. Severe structural damage is 1, major structural damage is .75, moderate is .50, minor is .25, and no structural damage is 0.
This number is then multiplied by the mileage. Zero to 19,999 miles is 1, 20,000-39,999 miles is .80, 40,000-59,999 miles is .60, 60,000-79,999 miles is .40, 80,000-99,999 miles is .20, and anything over 100,000 miles is 0.
The result of this formula is the diminished value of your vehicle, according to the insurance company. Many times the insurance company’s value is below what you discover through your calculations.
When The Collision Lawyer steps in, the insurance company knows you are taking your
claim seriously and accepts our calculations.
7. Insurance Companies Look for Loopholes
Insurance companies may avoid assisting you with your claim by looking for loopholes such as not accepting an estimate provided by a repair shop. The Collision Lawyer can help you find a certified vehicle appraiser or another industry expert to perform the
research for you and even pursue litigation if your insurance company refuses to return your diminished value.
8. You Are Not Entitled to More Than Fair Market Value
Under current case law, the plaintiff is not entitled to damages greater than the fair market value of the vehicle before the accident.
9. You Cannot File a Diminished Value Claim If You Were At Fault
If you are at fault in a car accident or the damage was caused by something other than a car crash, you are not entitled to file a diminished value claim.
10. You Should Hire an Attorney
Filing a claim for diminished value against an insurance company can be tedious and complex since you have to compile a lot of documentation, prove the loss, and wade through the hoops created by an insurance company.
The Collision Lawyer has been successful in securing fair diminished value payments for our clients, especially ones who have much to lose because they drive a luxury vehicle.
The number of diminished value claims is on the rise in recent years, mainly because the price of a new car has increased substantially. Sometimes securing the extra 20% refund from the insurance company after an accident and repairs can make the difference in getting into a comparable car when it is time to trade. Contact us below for more information or a free consultation.