Diminished Value Claims Attorney Dallas, TX
Diminished Value Claims: Recouping Lost Value After An Automobile Accident
In the aftermath of an automobile accident, there are many damages. Some of these are immediate and obvious, such as damage which necessitates the repair or replacement of your vehicle. Other damages created by the accident might not be so obvious.
After suffering an accident, your vehicle’s value is diminished. Even if the vehicle is successfully repaired and restored to working order, it now has an accident and repair history.
While this reduced value might not be apparent when you look at or drive the vehicle, any attempts to sell, trade-in, or refinance your vehicle will take the vehicle’s history into account, resulting in a reduced evaluation of its worth.
Fortunately for drivers in the United States, there is a legal instrument known as a diminished value claim which allows you to recoup this loss in value after suffering an accident.
What Is a Diminished Value Claim and How Does It Work?
Filing a diminished value claim allows you to seek compensation for the diminished value of your vehicle after it has suffered an accident. Imagine you purchase a brand new car and just two weeks later are rear-ended, resulting in some substantial denting to your rear fender.
The damage can be repaired and cosmetically the vehicle looks fine. However, it now has an accident history, a repair history, and even though the fender has been restored, it is still damaged and no longer pristine. As a result, your new car’s overall value has gone down. This is referred to as diminished value.
In order to recoup this loss, you can pursue a diminished value claim to be compensated for the monetary difference between your vehicle's pre-accident value and its post-accident (and/or post-repair) value. Typically, a diminished value claim will be filed with the at-fault party’s insurance agency after an accident.
Insurers rarely offer diminished value coverage for vehicles they insure. This means that -- unless first party diminished value is specifically covered under your insurance policy -- you won’t be able to seek a diminished value claim for an accident where you are at fault. Third-party insurance companies are legally required to compensate you for diminished value losses after suffering an accident for which you are not at fault.
However, receiving this compensation will require you to prepare some information and file a diminished value claim with the insurance company.
How To File A Diminished Value Claim
While the process of filing a diminished value claim is fairly straightforward, state and local laws on diminished value claims vary.
It’s a good idea to look up your local laws and possibly consult with a legal expert while preparing your diminished value claim in order to maximize your claim’s chance of success.
The basic process of filing a diminished value claim involves:
- Find the market value of your car before the accident.
- Contact the at-fault party’s insurance agency and ask them to file a diminished value claim. Provide them with any necessary information they request to process your claim. They are likely to schedule an inspection of your vehicle.
- Await their response.
How Long Do I Have To File a Diminished Value Claim?
The statute of limitations for filing a diminished value claim varies from state to state.
In all 50 US states, you have at least two years after the date of the accident to file your diminished value claim. In some states, the statute of limitations is longer (as long as ten years in the case of Rhode Island, and three to six years in many other states.)
Consult your local state laws to determine how long you have to file your diminished value claim.
Calculating the Value of a Diminished Value Claim
While ultimately the insurance company with which you file your diminished value claim will calculate and determine the value of your claim, it is a good idea to calculate your diminished value claim yourself to get a rough estimate of how much it might be worth.
The rules and formulas which govern how insurance companies calculate and payout diminished value claims vary between insurance companies and states. The easiest way to get an estimate of your diminished value claim is to use our diminished value claim calculator.
With just a few details about the type of damage and type of repairs, your car’s mileage, and your pre-accident market value, our diminished claim value calculator will instantly give you an estimate of how much compensation you are due for any diminished value claim.
While our diminished value claim calculator can provide you with a rough estimate, it’s impossible to provide a completely accurate estimate. For a more accurate estimate, we recommend consulting with a legal expert.
Why Is a Vehicle’s Value Diminished After an Accident?
There are many ways in which a vehicle’s value can be diminished after suffering an accident.
Here are just a few:
- Accident and Repair History:
Any accident and repair history can reduce the value of the vehicle.
- Improper Repairs or Replacement Parts:
Vehicles can suffer additional damage while being repaired. Replacement parts may not be original parts and may be cheaper substitutes. Shoddy workmanship by repair workers can add further damage to the vehicle, such as scratches, improperly installed components, mismatched paint colors, etc.
- Irreparable Damage:
Some damages may compromise the integrity or structure of the vehicle in a manner that cannot be completely repaired. These damages may be physically irreparable or cost prohibitive to repair or replace. Even if the vehicle is restored to working order, it may have permanent damage which detracts from its value.
Relating to the different types of value which can be diminished after an accident, diminished value claims are divided into three broad categories:
- Immediate Diminished Value:
Refers to the value lost immediately after the accident occurs and prior to any repairs being made.
- Inherent Diminished Value:
Refers to the loss in value of a vehicle after it suffers an accident and is repaired. This is sometimes known as “stigma damage,” referring to the stigma attached to purchasing a vehicle that has been involved in an accident or undergone substantial repairs.
- Repair-Related Diminished Value:
Refers to the loss in value due to damages sustained while the vehicle was being repaired, due to errors or poor workmanship.