Diminished Value Claim

Diminished Value:

Is defined as the difference in value of a vehicle before a car accident and the value of that vehicle after a car accident.

Diminished Value Claim:

Is a claim against a third party for this difference in value.

It is important to understand that after a damaged vehicle is repaired fully it still has lost value.  The fact that the vehicle has been in an accident will follow that vehicle for the rest of its useful life and when that vehicle is sold or traded it will be worth less than a comparable vehicle that has never been in an accident.  This is why accident related diminished value is also called inherent diminished value. Think of it this way, would you pay the same price for two identical vehicles in all aspects except that one had been in a collision and repaired?  No you would not.

Contrary to popular belief, every State allows a diminished value claim.  The confusion surrounding diminished value claims, specifically the belief that most states to not allow a diminished value claim, arises because most States do not permit a diminished value claim to be made against ones own insurance company.  When you make a claim for damages against your own insurance carrier, under your collision coverage, you are making what is called a first party claim.  Again, most States either do not allow this type of diminished value claim, or they allow insurance carriers to include language in a policy precluding first party diminished value claims.  Every State allows a diminished value claim against an at-fault party (or their insurance carrier).  This is called a third party claim.

This website hopes to educate victims of car accidents on how to make a diminished value claim.  Issue that are discussed include:

• Can you make a diminished value claim
• When to make a diminished value claim
• Should a diminished value claim be pursued
• What is needed to make a diminished value claim – diminished value reports
• How to make a diminished value claim
• When to settle your diminished value claim

You will also find advice and examples including a sample diminished value demand letter.  With this information it is our desire to educate consumers about diminished value so that they can seek full and just compensation after a car accident.

Don’t Let The Insurance Company Say No To Diminished Value

One of the greatest areas of confusion in car accident claims surrounds making a diminished value claim.  The reason for this confusion is  related to the lack of knowledge surrounding the right to make a diminished value cailm and unfortunately more likely due to insurance companies and the at-fault driver’s desire not to pay money to make the victim whole again.

Diminished value is the loss of value a car suffers after a car accident and after the car is repaired.  Diminished value is inherent to the vehicle and not related to the repairs. Diminished value is a stigma.  A car that has been in an accident, even after repaired, is still worth less than a the same car that has not been involved in an accident.

Every State permits a third party claim for diminished value.  What this means is that if you were not at fault in the accident, you can claim diminished value from the at-fault driver or their insurance carrier.  The at-fault driver or their insurance company is the “third party”.

Only a handful of States allow a first party diminished value claim. First party claims are a claim against your own insurance policy.  Therefore if you were at fault in the accident, you can not make a diminished value claim unless you live in one of the few states that permit first party claims.

It is is extremely simple.  If you were not at fault, don’t let the insurance company tell you you can not make a diminished value claim.

Where To Find A Diminished Value Report

The word is out!  More and more consumers are learning about their right to claim diminished value after a car accident.  Fortunately, there is a developing market of diminished value report producers to supply people with the evidence they need to make a diminished value claim.

To make a diminished value claim you need evidence of your loss.  Without selling your vehicle the best evidence is a professionally prepared diminished value report.

Online, there are numerous companies that will prepare a report for a fee.  Fees range from under $50 to several hundreds of dollars.  Using an online company is a good idea if you do not plan to go to court, even if the claim is denied.  Another great use of an inexpensive online company is to buy an inexpensive report to see how much your claim might be worth.  This is helpful if you have a borderline claim (not a lot of damage or an older car) and don’t want to spend hundreds to determine if the claim is worth making.

If you are certain that you will follow the claim to the end (a court date if needed), a local company might be a better choice, especially if your jurisdiction requires testimony from the expert.  Local companies can be found by searching for auto appraisers in your local directories.

Diminished Value Is Like A Stigma

When you car is damaged in a car accident it loses value.  This loss of value remains even after the vehicle is repaired.  The car could be in perfect condition after being repaired and you might be able to fool an expert mechanic with the repairs, but the fact remains that the vehicle has been in an accident and therefore is worth less than a comparable vehicle that has not been in an accident.

For the rest of its useful life, a car will carry with it the fact that it has been in a previous collision.  This can bee seen as a stigma.  A stigma is defined as a mark of disgrace or a stain on ones reputation.  This is exactly why a claim for diminished value is recognized after a car accident.  The stigma of having been in a previous car accident will forever effect the value of that vehicle.