Diminished Value Frequently Asked Questions
The legal term Diminution of value also called accelerated depreciation, it is the vehicle value lost because of a car accident, natural disaster or faulty repairs.
Types of Diminished Value?
Immediate DV is immediately after the car has been involved in a car accident, as the name entails immediate is even before the repairs are done the car already lost the value also called accelerated depreciation.
Inherent DV is the financial loss a car sustains even after repairs are done correctly, simply because the vehicle has a history of an accident.
Repair related DV is when a car is not fixed the way it was originally intended to be fixed, which could mean not using OEM parts, using recycled junk yard parts or LKQ or even something very simple which 80% of body shops do not do such as pull the frame to ensure correct alignment after an accident and measurements.
Can I Collect Diminished Value In my State or For My Claim ? If you are not at fault, you can collect in every state from the at fault insurance company or driver except for Michigan where you must take the at fault driver to court.
In cases of Uninsured and Under-insured motorist? it is dependent on your insurance policy.
In cases of First Party Claims? where you are at fault, only Georgia, Kansas and Washington allow you to file a claim against your own insurance policy with the accident being your fault.
The Damage was under $1000 Do I have Diminished Value? The damage on the vehicle is what is important, the amount is not. Some cars sustain frame damage with a couple hundred dollars in damage and others have thousands in repairs and it is only panel damage.
What is a diminished value claim? It is a car insurance claim much like a personal injury, nothing like a repairs claim. You must have proof beyond a reason of a doubt showing that your vehicle has incurred a loss.
How to file a diminished value claim? The burden of proof is on you, so after you have your proof not simple print outs from KBB, Edmunds, NADA etc or simply car dealer trade in value which is all speculation and not factual information then you prepare a demand letter and submit the proof to the insurance company.
How to determine or calculate diminished value and formulas? There are several ways to calculate diminished value but most are wrong. The insurance company uses 17c or something like it, many so called dv experts use a repair approach which assigns a percentage of loss based on repair amount: This is illegal and against the insurance commissioners model act but still done by assessment companies and instant low cost reports. Some companies use ACV which is also not correct as they take repairs and deductions for age, mileage and condition which sounds correct but is not what the market actually is. The live market valuation shows a valuation floor based on the lowest amount possible the car has ever been sold for in your area and deducts based off of the actual loss based on a percentage of damage and not the damage cost. This also goes in line with the comparable market approach.
Diminished value lawyer and Personal Injury attorneys? Most attorneys do not take dv claims because the state does not allow recovery of attorney fees and do not allow the recovery to be taken from damages or the diminished value.
Claim Information by state for Diminished Value Claims
California, New Jersey and Arizona Diminished Value claims how they are different? The insurance companies are very difficult to work with and require more proof than any other state to open a claim.
Florida Diminished Value how it is different? In Florida a third party bad faith claim is allowed, meaning that if the insurance company tries to cheat you then it is possible to sue for a type of fraud and unfair business practices.
Texas Diminished Value how it is different? The state of Texas has Stowers demand and in some cases give the insurance commission to force payment for diminished value without court. There is also a bulletin from the commission showing procedure for dv.
Kansas and Oregon Diminished Value Claims? If you Do retain an attorney and the insurance company fails to pay your Diminished Value claim within 30 days, the insurance company can be ordered to pay ALL your attorney’s fees and expenses. That way, you get to keep 100% of your settlement .
Georgia diminished value formula 17c? The insurance commission has stated that they do not endorse this formula and have stated to insurance companies that it is not correct. The formula was used on a class action lawsuit and not allowed in court again. Basically it starts with a 10% cap amount of the cars value and then starts doing double dip deductions for all things already accounted for in the car price. So car value $10,000 and 10% cap is $1,000 then they deduct again for mileage, year and damage so a claim like this would end up being $0-100 in most cases. It is borderline fraud but if you don’t fight it then it is deemed acceptable.
North Carolina Diminished Value Claims? The state has a process of processing claims through a set of guidelines and procedure that states if there is a disagreement between what the insurance company offers and what your appraiser offers the claim goes to arbitration/mediation process with a third party to settle the claim.
How to prove diminished value? Get a reputable diminished value appraisal from an expert, you need as much proof as you can get as the insurance companies are not easy to fight on a claim.
How to get diminished value from insurance company? You must prove the loss and submit a claim, then in most cases negotiate the amount and settle.
What to do after an accident and when to claim diminished value? Remain calm, call the police and try to get a police report, then pick your own body shop. Wait until you have a repair report before repairs and decide if you want to use that body shop and after that proceed with your diminished value claim. Please read total loss procedure below to force or not cause a total loss when expensive repairs are being done.
How much does a car depreciate after an accident? It depends on the vehicle, there is no set percentage and it is dependent based on the severity of damage though some companies and dealers say it can be up to 50% of the vehicles value.
Trade in value after accident? You should go to at least 10 car dealers since some use MMR which is auction quotes this will make your car worth up to 30% less than what it already is just so they can make extra money and other dealers are wholesalers and so they buy low enough to resell cars to other dealers.
Do insurance companies pay for diminished value? The at fault driver is responsible to pay for dv but the insurance company pays it if there is enough proof or if it is within policy limits.
How Do I Collect Diminished Value? You must prove diminished value, open a claim and submit the claim. In some cases you must go to small claims and prove it to a judge, get a judgement and then collect for the claim.
Who do I sue diminished value for? The at fault driver is always the one that is sued for the claim.
Diminished value vs. total loss? When a car has repairs issued but is not considered a total loss, some claims for diminished value put it over the total loss threshold depending on the amount of the claim and repairs combined together. So if you do not want your car to be totaled please be careful of when you submit a diminished value claim before repairs are done or in the process of repairs.
Gap insurance and Total Loss with Diminished Value? When the car is totaled in most instances gap covers up to 150% of the vehicle deficit.
How much does a diminished value appraisal cost? The average price is $150-500 unless the car is exotic or high-end luxury which can be several thousand.
What is a diminished value assessment? An automated estimate and no legal considered proof in any form.
Can you claim diminished value on a leased car? No you are not the legal owner of the vehicle, the leasing company is the one who will claim for diminished value.
Sold Car already? Can I still get diminished value? Yes as long as the claim falls within the statue of limitations, you own the claim.
Diminished Value Proof with Car Dealer quote? Car dealers give you trade in value which is not proof, if they gave you letterhead with signature and state that they have no interest in purchase of vehicle then they can be issued a subpoena for the letter and so they do not do it in the sense of actual proof and a trade in valuation is biased based on the want to purchase a vehicle for the lowest price possible.
Will I Need Help to Settle My Claim? The insurance company is trained to deny claims and try to delay and force the claimant/victim to drop the claim. They come up with excuses such as the car is worth more now with a new bumper or don’t report the accident it is not on Carfax so there is no diminished value. This is considered fraud for you to not report a car accident and they are telling you to commit fraud. So in most claims you need some sort of help or advise, unless you are just willing to settle for anything they through at you.
Expert Witness and Diminished Value Experience? No fly by night company will offer these services so it is a good measurement to understand the company, also many companies use automated reports without signatures which will never show any experience or even less to act as an expert witness.
Can I get diminished value on more than one accident? Yes, it is dependent on the area of the damage to your vehicle and severity. For example if the first accident had frame damage there is not dv left but if the first accident had bumper damage and the second has bumper, fenders etc. or structural/frame damage then you can get a second or even third diminished value claim.
Cheap Diminished Value Reports? Avoid prosecution for fraud, the assessments or reports are based on automated software which is based on percentages of repair cost and not severity of damage and most do not have a signature or anyone who makes themselves responsible for producing the amount of the claim asked for.
My car was in an accident but has no Carfax record? First off Carfax is a third party independent company, it is not affiliated with any government. Secondly, every state has disclosure laws which make it illegal to sell a car without disclosure of a previous car accident.
Statute of Limitations for Property Damage Claims Nationwide
A statute of limitations requires a claim to be settled or lawsuit initiated within a certain time period. Please Use the list below to determine how long the Statute of Limitations for your Diminished Value claim is in your state:
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