You are probably aware that if someone causes an accident that damages your car, their insurance will pay to fix your vehicle. However, you may not know that you could be entitled to an additional payment to cover the diminished value of your car.
Diminished value refers to a vehicle’s lower re-sell value due to prior accident damage. In other words, when trading in your vehicle, you will likely receive less money.
Here is a game plan for pursuing diminished value compensation:
- Contact the other driver’s insurance claims department and tell them you would like to pursue a diminished value claim.
The claims representative will want to know: How long you have owned the car? Has the car been involved in any prior accidents? If you bought the car used, is there any knowledge of a prior accident?
Be aware that the at-fault driver’s claims rep will rarely offer diminished value compensation voluntarily. Some insurers may even state that they do not pay diminished value claims. This is untrue. Also, some insurers may say that they do not pay diminished value claims for vehicles over 5 years old. That also is not true, as there is no statute in N.C. that allows them to deny a diminished value claim based on the age of the damaged car.
- Get an independent diminished value appraisal.
This is the only way to accurately determine your vehicle’s diminished value. Our office can refer you to local appraisers to help with the valuation, which costs in the $200 range. When filing the diminished value claim, the at-fault insurer may request that you provide an appraisal to start the process. If so, ask them if they will reimburse you for the cost of the valuation. If you voluntarily present the appraisal, they likely will not reimburse you.
A copy of the diminished value appraisal can serve as proof to the at-fault insurer’s claims representative that you deserve compensation.
- If the insurer still wants to deny the diminished value claim, file a small claims suit directly against the at-fault driver.
Of course, this will be time consuming and require further commitment on your part. However, it is likely that once the at-fault driver receives a small claims court summons, they will immediately get in touch with their insurer, which will hopefully motivate the insurer to address your car’s diminished value.
Keep in mind that diminished value claims are a negotiated process. Be prepared to stick to your guns with the at-fault adjustor!
Here is an insightful news segment from ABC11 about a local man’s process of filing a diminished value claim.
Here’s to your safe driving!
Greg
