10 Ways to Collect for Your Car’s Diminished Value after Accident Repairs
If your car was involved in an accident that wasn’t your fault during the past two years, you might want to look into making a third-party claim for the inherent diminished value of your vehicle against the at-fault party’s insurance company. After accident repairs, your car has a repair history which devalues your vehicle, sometimes by as much as 50% of it’s pre-accident Fair Market Value.
You play an important role in successfully navigating the narrow channel that typically defines an insurance claim. If you demonstrate persistence that is backed by accurate reporting and expert advice from your auto appraiser, you can avoid the need for litigation and secure a fair settlement.
10 Ways to Collect for your Car’s Diminished Value after Accident Repairs
1. Confirm Liability
Yours is likely a third-party claim which essentially means you are asking the “other guy’s” insurance company to reimburse you for your car’s diminished value. Almost every car will lose value once it has undergone repairs. Determine that their insurance company has accepted full liability. It is their responsibility, under the property damage section of their insured’s policy, to make you whole. That includes the auto diminished value claim.
2. Obtain a Repair Estimate
Your car’s first stop after a collision is the auto body shop that you have selected to perform the repairs. Ask the shop manager to write as comprehensive an estimate as possible without having to dismantle the car. Air bag deployment will be obvious and structural damages is usually evident to a qualified estimator. It is these two categories of vehicle damage that most impact your car’s diminished value. Minor damage will devalue a car by ten to twenty percent. Air bags or structural repairs typically diminishes a car’s value by around half.
3. Create a Folder on your Desktop
A Third-party inherent auto diminished value claim is typically met with skepticism by insurance adjusters. Insurers are no different than other businesses in that they value profits. If the opportunity is there to limit the amount they pay out in claims, that’s the path they generally prefer to take. There will be a certain amount of back-and-forth during the process of reaching a fair settlement. You will need a place to store all of those correspondences. Although most auto diminished value claims are settled without a need for litigation, if it comes to that, those records may have great evidentiary value.
4. Prove that your Car has Lost Value
It is the car-owner’s responsibility to demonstrate why the insurance company should consider reimbursing you for your car’s diminished value. There are many examples of how car-owners try to do this that range from obtaining a letter from their dealership to hiring a professional auto diminished value appraiser.
5. Get Support
The world of auto diminished value claims is foreign to most of us. It’s great news to learn that it is possible to be reimbursed for your car’s loss in value. Your collision shop handled all the negotiations to arrive at an agreed price with the insurance company for repairs. However, unless you hire an attorney to do all of the legwork, now is when you have to go it alone. In whatever form you choose to prove your car’s diminished value, that paperwork will be sent to the insurance company adjuster by you. Likewise, all telephone and email exchanges with the insurer will involve your participation. There are many online forums where you’ll find discussions about auto diminished value claims. But also, be advised that not everything you read represents an accurate interpretation. Focus on posts that reveal positive outcomes and how they were achieved rather than opinions on the subject. You can find many such comments HERE.
6. Which Methodology is Best?
While it may be cost-effective, as in free, to obtain a letter from your dealership attesting to your car’s loss in value, most dealers won’t provide it over concerns of being called upon to testify in court. This may be a blessing in disguise because an insurance company’s typical response would be that YOUR OWN dealer’s business model is to buy low and sell high. The opportunity for dishonesty exists and that is reason enough for insurers to deny your claim. You can compile on-line comparisons, which can be easily challenged, between clean vs. previously-repaired cars at various web sites. This approach is also free and all you’ve got to lose is the time you spend researching and another denial if the insurance adjuster is sharp. Then there are independent appraisers and adjusters. Some conduct actual research while others prepare auto diminished value reports based on every conceivable assortment of formulas such as Rule 17C as well as algorithms – basically short-cuts that don’t translate to real-world outcomes.
7. Choose an Independent Appraiser
If you’ve decided to pursue your auto diminished value claim by hiring an independent appraiser or adjuster – methodologies, prices, levels of expertise, client base and customer support are all important considerations. Methodologies range from simplistic – such as an “expert opinion” citing the appraiser’s affiliations, years in the business, etc. – to short cuts such as formulas, algorithms, comparisons-based on valuation guides or online auto sales to suit the particular client – to fully-researched auto diminished value appraisals based on the unbiased, real-world opinions of multiple professionals in the field of buying and selling cars. Regarding the independent appraiser’s or adjuster’s client base, a company that works for insurance companies as well as for car owners is less reliable as an advocate than a company that works only for the public.
8. Attorneys
If you were injured in the accident, your personal injury attorney may also handle the matter of the auto diminished value. In the event that you wish to hire a lawyer to represent you solely for a diminished value case, it may prove difficult to find one willing to represent you as the financial reward for their firm is typically low. Not many auto diminished value claims are escalated to lawsuits but sometimes it may be necessary to do exactly that. Your independent auto appraiser should be willing to advise you but legal matters may require basic guidance from a lawyer or paralegal. Even if no lawyer wants to take your case on contingency, you may inquire about paying their hourly rate for a short meeting to explain procedures as well as pitfalls you may encounter in court.
9. Prepare for Denials or Low-Ball Offers
A claimant should realize that the first file handler or adjuster you speak to has but one job – to make you go away for as little compensation as possible. Your independent appraiser should provide suggestions on how to best file and pursue your auto diminished value claim. One of those suggestions should direct you to escalate your claim to a supervisor. And, if that has little effect, continue escalating the claim until you have reached a manager with the authority to make decisions. Many legitimate auto diminished value claims are in the tens-of-thousands of dollars so they are worth pursuing with vigor.
10. Take Them to Court
Most of us are too busy to waste time going to court. There are also expenses involved. It’s a cost that, unfortunately, may be necessary because of bad faith on the part of the insurance company. Recognize that the insurer feels the same way so the old adage that defendants don’t like to settle until they reach the courthouse steps may apply. Your lawsuit will be against the responsible party. If your evidence is solid and unimpeachable, you should prevail before any judge or a jury.
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