WHAT ARE THE BENEFITS OF FILING AN AUTO DIMINISHED VALUE CLAIM?
Once a car has a repair history, it’s value is decreased. This is known as inherent diminished value. If the accident was the fault of another, the insurer of the responsible party is obligated to compensate the car owner for this loss. These claims can range from a few thousand to tens of thousands of dollars.
HOW IS THE AMOUNT OF DIMINISHED VALUE CALCULATED?
The most accurate methodology for determining the existence and approximate amount of diminished value requires extensive research with car dealers and other potential buyers of used cars. This is the typical end-market for car owners which appropriately represents real-world conclusions.
WHY DO PEOPLE FEEL THAT DIMINISHED CLAIMS ARE HARD TO COLLECT?
As years go by, insurance company representatives have had to abstain from declaring that properly repaired vehicles do not lose value. Public perception has changed, making the insurer’s arguments appear deceptive. However, this practice does persist as does low-balling.
WHAT DOES LOW-BALLING MEAN WHEN IT COMES TO DIMINISHED VALUE CLAIMS?
The purpose of all business is to profit. In order to maximize that plan, many insurance companies handle claim payouts in a take-it-or-leave-it manner. Their reasoning is that the few claimants who persist are worth paying from the money they saved lowballing those who did not.
IS SELLING OR TRADING MY CAR NECESSARY TO PROVE DIMINISHED VALUE?
There is no insurance regulation or case law that suggests that this is the case. Additionally, insurers will not compensate claimants for the diminished value based on any loss they experienced in the transaction.
HOW DO I FILE A DIMINISHED VALUE CLAIM?
After liability is determined, a car owner can either cobble together a loss in value document or hire an independent appraiser to determine their car’s diminished value. That appraisal, along with a demand letter, should be sent to the claims department of the responsible party’s insurer.
WHAT IS THE TECHINAL NAME FOR REQUESTING DIMINISHED VALUE?
The car owner will be making a third-party inherent diminished value claim. The literal Latin translation for “inherent” is to adhere or to cling to. The repair history remains fixed to the car for its lifetime, causing a reduction in value.
SHOULD I HIRE AN ATTORNEY TO REPRESENT ME FOR DIMINISHED VALUE?
Most car owners file diminished value claims on their own without benefit of an attorney. In cases where attorneys do assist them in diminished value, they do so for a percentage of recovery and there are usually personal injury claims involved.
HOW CAN A CONSUMER FIND A LAWYER FOR A DIMINISHED VALUE CASE?
Attorneys typically decline to represent car owners solely for diminished value cases. The thirty or forty percent commission on a five or ten-thousand dollar auto diminished value case represents inadequate compensation for pursuing litigation.
IS DIMINISHED VALUE DIFFERENT IN DIFFERENT STATES?
Third-party inherent diminished value claims are made against the property damage portion of the responsible party’s auto policy. In all auto policies, a guarantee is made by the insurer to make a claimant whole. Property damage has long been defined as including diminished value. Only in Georgia can a car owner make a diminished value claim against their own insurer.
WHAT CAN I DO ABOUT DIMINISHED VALUE IF THE RESPONSIBLE PARTY IS UNINSURED OR UNDERINSURED?
Uninsured/Underinsured Motorist Property Damage coverage is available in many states, but not in all. If a car owner does not have this coverage, the only alternative is to take legal action directly against the responsible party.
CAN I FILE DIMINISHED VALUE IF MY CAR WAS IN A PREVIOUS ACCIDENT?
A typical insurance company response to a diminished value claim that is made for a car that was previously repaired is to deny the claim. There is no insurance regulation or case law to support such a denial. An accommodation should be made either by the consumer or the appraiser that accounts for the previous repair history and makes necessary adjustments.
HOW MUCH DO INDEPENDENT APPRAISERS CHARGE FOR DIMINISHED VALUE APPRAISALS?
An average fee for an independent appraiser to prepare an auto diminished value appraisal is $350.00. Their service should include an appropriate amount of advocacy to help with denials and lowball settlement offers.
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