After a car accident, the value of your car may drop even lower. This is called diminished value, which is the difference in the market value of your car before and after the accident. Depending on the circumstances of the accident, an auto insurance company could pay for the decrease in value of your vehicle after a covered loss. This difference between what the car was worth before the accident and the market value of the car after the repair is known as diminished value.
Diminished value is the loss of the market value of a vehicle after the damage is caused by an accident. As soon as a vehicle is involved in an accident, the market value of the car decreases, even if the damage is fully repaired. Why is this? The value of a vehicle decreases after an accident because the consumer's perception of the value of the vehicle decreases. In many cases, the car has been completely repaired after an accident and yet its value is still lower than before the car was involved in an accident.
To recover the diminished value of a vehicle, consumers must file a decreased value claim with their insurance company. Inherent diminished value describes the loss of value of a vehicle even after repairs have been made to restore the vehicle to its original state. This type of decline in value occurs when the vehicle loses value simply because it now has a history of damage. Inherent diminished value is the most common type of diminished value claim.
The immediate diminished value is calculated as the difference in the resale value of a vehicle immediately before and after an accident. This is the most common type of diminished value used in court systems, but it is rarely used elsewhere. The diminished repair-related value refers to the loss of value of the vehicle depending on the quality of the repairs performed after an accident. This type of decreased value means that the vehicle cannot be fully repaired to its original condition after an accident.
People file a reduced value claim with an insurance company to seek compensation for the difference between the value of the car before the accident and after the car has been repaired. For some people, a low value claim can mean thousands of dollars back from their insurance company. If you have been involved in an accident and believe that your car has lost value even after it has been repaired, contact experts in diminished value claims to determine its diminished value. To receive adequate compensation for the decline in value, you must first receive a credible appraisal demonstrating the loss in value of your vehicle.
Then, work with the responsible party involved in the accident and the insurance company to receive the compensation you deserve. According to Lawsector, taking the case to court is a last resort option that must sometimes be taken to receive the loss in value of your vehicle. Answer our short diminished value rating questionnaire to see if your situation qualifies you to file a diminished value claim. Our free reduced value claims review will provide you with the answers you need to make informed decisions.
You may be entitled to receive a check from the at-fault party's insurance company for the decline in value of your vehicle. To maximize the amount of the recovery of your diminished value, you'll need an independent professional to provide you with an expert assessment of your diminished value loss. If your reduced value claim is denied or if you receive a low offer, you'll want to negotiate first. If you're wondering what the decline in value means, you've probably had an accident recently and are trying to recover everything you can from this unfortunate event.
Most auto insurance companies in the United States calculate the diminished value using a formula called 17c. You must file a reduced value claim when you have a car accident in which the other party is at fault, to recover the decline in value of your car. According to formula 17c, the amount of mileage on a car affects the diminished value twice, once below the market value of NADA and again when evaluating the mileage multiplier. Comprehensive and collision coverage pays only the amount needed to repair or replace the damaged vehicle and does not cover the decrease in value.
You should expect to recover a larger amount of decreased value for a newer car with lower mileage and a lower decreased value for an older car with higher mileage. The key to negotiating a lower value is to obtain evaluations and inspections from reputable third parties. Your vehicle has already been repaired, so its value should not be reduced. As mentioned earlier, no matter how good the repair work was, your vehicle now has a track record that may bias future car buyers.
Just because you've been in an accident doesn't mean that you automatically qualify for a reduced value claim. There is a possibility that insurance will pay for the decrease in the value of a vehicle after an accident has occurred. Understanding how insurers calculate diminished value will help you negotiate optimal compensation. The key to recovering the full amount of your diminished value loss is to submit to the insurance company a complete, professionally prepared estimate of your diminished value.