In car accidents, actual cash value vs. diminished value of the vehicle becomes a big concern for the owner.
Whether you like it or not the value of your car will significantly be reduced once it gets involved in a vehicle collision.
Now if your car is totaled, and considered a total loss, the insurance company may deem to give you a check than pay for your repairs, your rental and whatever costs that comes with it.
You and the insurance company will have to come to an agreement about the actual cash value of the car before the collision and the amount you get may be used to purchase a new car.
But if the car was not totaled and have been repaired you now have to consider the reduced value of the car.
Even if the repairs did a good job on making it look new, just the fact that it has been involved in a car accident lessens its market value.
So what can you do about it?
Well, what you can do is file for a diminished value claim with your insurance company.
This refers to how much the actual value of the vehicle has been reduced as a result of the vehicle collision.
But how do you know if your car suffered a diminished value?
Well that really depends on your car.
Cars that's new, in great pre-loss condition and do not have any significant damage history will definitely have diminished value after.
Cars on the opposite end (old, not in good shape before collision, and with major repair history) would probably be denied.
You should consult an expert on diminished value claims to calculate the diminished value of the car.
Other requirements that have to be met for your claim to be valid are:
- You are not liable for the car accident
- The liable party has insurance or you have uninsured motorist coverage
- Damage estimate is more than $200,000
- Car is not deemed a total loss (Insurance company will probably pay you Actual Cash Value)
Now if you determined that your car did suffer diminished value, your next move is to file a claim.
But how do you do that?
You can follow these steps when filing for a diminished value claim.
- After the repairs in your car, contact an expert on diminished value claims to get a stand-alone official diminished value report that will indicate actual market research information, actual sales data and it should conform to the uniform standards of appraisal practice. The report should also include a history check of the car.
- Present a letter of demand to the insurance company.
- If the insurance company denied your claim, you may have to file a lawsuit to claim compensation.
You should consult an expert car accident lawyer for help when making this claim.