Following an auto accident, one or both vehicles involved has typically been altered and needs repairs. Even after the repairs have been performed, has your car’s value decreased?
Diminished value is the difference in a vehicle’s market value after it has been involved in a car crash and subsequently repaired. Most people are not willing to pay full price for a vehicle that has been in an accident, especially if the accident was relatively severe. But, most individuals do not know that insurance companies may pay for both vehicle repairs and for the diminished value difference.
Even if all of the repairs, body work, and paint have been completed flawlessy, the vehicle may still lose some of its pre-crash value. There are companies that specialize in determining diminished values for the car owners, typically at the request of the insurance company. These companies would be contacted if your insurance company is notified that you expect to collect diminished value after a crash. An unbiased third party appraiser would then establish the loss in value and record a diminished value report.
Several insurance companies use a formula called 17C to determine diminished value, a value that may unfairly and inaccurately calculate current market value.
Car insurance companies don’t want to you to know about diminished value.
Car insurance companies will have every reason to deny that your vehicle has experienced any loss in value, or diminished value. In some claims there could be very minimal value difference, while in others the difference could be huge. When evaluating diminished value, here are some things to be considered:
- The quality of repair: Following your repairs, is it obvious that your vehicle was involved in an accident? Check to see if it has paint lines, paint color shade difference, uneven body panels, etc.
- The parts used: Aftermarket parts are available in both high and low quality. If the parts used on the vehicle were of low quality, they could affect durability, appearance, and value.
- Factory warranty: Is the vehicle still under factory warranty? If so, find out if the fact that the car was in a crash will have any affect the warranty coverage.
An Example of Diminished Value
A brand new vehicle is worth $30,000. It is rear ended, and the damage is estimated at $10,000. Your own insurance companies pays for the repairs.
The body shop did great work, and the car looks brand new again. So, the newly repaired car is still worth $30,000 then, right? No, not so quick. First off, CARFAX, which is used by dealers and potential buyers, will have a complete car history report included information about the accident. Therefore, many car dealers cannot market this car as a “certified” used vehicle anymore, which greatly reduces its value. Even buyers that access the CARFAX report are more likely to look elsewhere, unless they can buy the repaired vehicle at a reduced price. If the new buyer is willing to buy the car for $22,000 because it had been damaged and repaired. Then, the diminished value would total at $8,000.
So, the conclusion of this example is to check both insurance policies closely after an accident. Weigh in both the age of the vehicle and severity of the crash when calculated diminished value, and consider having an expert conduct a value report after an accident.
Experienced Missouri Car Crash Lawyer
If you have sustained injuries in an accident that was the fault of another driver, you may be entitled to compensation for your injuries and for the diminished value of your vehicle. A professional Missouri Injury Attorney can evaluate the diminished value of your vehicle, and include that in your settlement demand to the insurance company. Attempting to collect for all of your harms and losses from the insurance company on your own can be a nightmare, and chances are you will not get a fair reimbursement. With an experienced St. Louis injury attorney, licensed to practice in all of Missouri, on your side, you will be properly equipped to fight the insurance companies for fair compensation. Give us a call today for a free case consultation at 314.409.7060 or 855.40.CRASH.