The Complete Guide to Diminished Value
Diminished Value is the loss in market value of a vehicle after damages are caused by an accident. As soon as a vehicle is involved in an accident, the market value of the car decreases even if the damages are fully repaired. Why is this? A vehicle’s value decreases after an accident because consumer’s perception of the vehicle’s value decreases. In many cases, the car has been fully repaired after an accident and yet the value of the car is still less than before the car was involved in an accident. To earn back the diminished value of a vehicle, consumers should complete a diminished value claim with their insurance company.
Types of Diminished Value
1. Inherent Diminished Value
Inherent Diminished Value describes a vehicle’s loss of value even after repairs have been made to restore the vehicle to its original condition. This type of diminished value occurs when the vehicle losses value simply because it now has a damage history. Inherent Diminished Value is the most common type of diminished value claim.
2. Immediate Diminished Value
Immediate Diminished Value is calculated as the difference in resale value of a vehicle immediately before and after an accident. This is the most common type of diminished value used in court systems but is rarely used elsewhere.
3. Repair-Related Diminished Value
Repair-Related Diminished Value refers to the loss in vehicle value based on the quality of repairs made after an accident. This type of diminished value assumes that the vehicle is not able to fully repaired to its original condition after an accident.
Diminished Value Statistics
What is a Diminished Value Claim?
Individuals file a diminished value claim with their insurance company in order to request compensation for the difference between the car value before the accident and after the car was repaired due to an accident. For some individuals, a diminished value claim can mean thousands of dollars back from their insurance company.
How to Qualify for a Diminished Value Claim
Just because you’ve been in an accident does not mean that you automatically qualify for a diminished value claim. Qualifying for a diminished value claim is determined based on the circumstances, the state, and the insurance policy. In order to determine if you qualify for a diminished value claim, it is best to use a resource such as Collision Claims’ diminished value claim quiz.
Here are a few factors that might mean you qualify for a diminished value claim:
Take the quiz to determine if you qualify for a diminished value claim! Diminished Value Quiz
The Process of Filing a Diminished Value Claim
Step 1: Prove your car has lost value
The first step in the diminished value claim process is to prove that your car lost value after being repaired after an accident. A diminished value expert, such as Collision Claim Associates, is necessary in order to prove this loss in value. An expert will determine the loss in value based on collision damage analysis, and the vehicle market. An unbiased, third party diminished value expert is the only able to provide the necessary documentation that can prove a loss in vehicle value.
Step 2: Claim is sent to the responsible party
After establishing the amount of your vehicle’s diminished value and the proof of loss, the documentation will need to be submitted with a formal demand for payment letter. This demand letter, along with your proof of loss documents, should be sent to the responsible party through certified mail/return receipt requested. This will provide proof that the demand of payment has been requested and will also provide proof that the letter was received when you receive the delivery receipt with their signature.
Step 3: Claim settlement
Once the demand letter has been sent along with a proof of loss to the responsible party, their response will determine the next action steps. The responsible party will either reply with a payment in full, or will try to negotiate down the demand. Negotiating down the demand may involve trying to refute your documentation, offering some other evidence that the loss is much lower than your demand, hiring their own “independent appraiser”, or denying the claim outright. In order to successfully receive the diminished value you deserve, you will need to be prepared to respond to any of these potential responses. If a reasonable settlement can not be reached, the final recourse would be to file a lawsuit against the responsible party. Working with a diminished value claim experts, such as Collision Claims, allows you to be successful in collecting your vehicle’s diminished value.
Will insurance pay for diminished value?
There is a chance that insurance will pay for the diminished value in a vehicle after an accident has occurred. However, it depends on the circumstances and which state you are living in. Not every state has laws concerning diminished value and not every insurance company offers coverage for diminished value, so it is important to understand what your state and the insurance company offer.
How to determine diminished value after an accident
If you have been involved in an accident and believe your car has lost value even after being repaired, contact diminished value claim experts to determine your diminished value. In order to receive the proper compensation for your diminished value, you must first receive a credible diminished value appraisal to show proof of your vehicle’s loss of value. Then, work with the responsible party involved in the accident and the insurance company to receive the compensation you deserve. Taking the case to court is a last resort option that sometimes must be taken in order to receive the loss in value of your vehicle.
To start the process of a diminished value claim, contact the experts at Collision Claims!
DV Qualification Quiz
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