If your vehicle is damaged in any way after an accident, the value is diminished. Not only is the resale value of the car diminished, the down payment you could put on a new car is also diminished, if not gone.
Insurance companies are aggressive and intimidating. However, if the diminished value of your vehicle is significant, it is worth fighting for the compensation you deserve.
What Is Diminished Value?
Diminished value occurs when the value of a vehicle after an accident is lower than the value of the vehicle before the accident. Diminished value is more than the cash value. For example, a buyer is more likely to purchase a vehicle with no accident history than a similarly priced vehicle with an accident on record.
How Is Diminished Value Calculated?
The idea of car insurance is to return the person and the vehicle to pre-accident conditions. If the vehicle is no longer worth it's pre-accident value, the insurance company cannot claim that all damages are paid.
Every insurance company uses their own diminished value calculator. They use a formula to determine the cost of diminished value. Unfortunately, insurance adjustors are trained to offer you the smallest compensation possible. Do not accept an offer that is too low.
Get your own diminished value appraisal conducted. Your car dealer or another non-insurance appraiser can help you document your vehicle's loss of value. Their diminished value calculator will take into account the following:
- Value of the vehicle
- Resale value
- Mileage
- Damage incurred
How Can I Be Compensated For Diminished Value?
There are several ways to be compensated for diminished value.
- Receive money for the diminished value amount: This should cover the full difference between the pre- and post- accident value of the vehicle.
- Repair and restoration to pre-accident value will be paid for by the insurance company: This should include full restoration but may not cover decreased value for the next buyer.
- Claim an income tax deduction: While this option seems like a bad deal, it is a great option for regaining some lost money if the vehicle is still diminished in value.
Get The Money You Deserve. Your Lawyer Can Help.
If you feel that you are not being compensated fairly, consult your lawyer. You may receive up to eighteen percent more in diminished value compensation than if you pursue the case by yourself.
