After an accident be sure to consider the diminished value of your vehicle.
What if I were to tell you that there is a hidden loss of value after car wrecks that insurance companies attempt to hide? It's true, this loss of value is referred to as diminished value. So what is diminished value? Diminished value is the inherent loss of value that a vehicle incurs after requiring repairs from an accident.
Vehicles that have an accident history carry a stigma. All other things being equal, an intelligent consumer is not going to pay the same price for a vehicle that has been involved in a prior car wreck and repaired as compared to the same or similar vehicle with no accident history. Even when a damaged vehicle is repaired to the highest standard, it will inherently lose resale value. For example, suppose that another driver rear ended your vehicle, causing $8,000 in damage. Prior to the accident your vehicle was worth $30,000. The other driver's insurance company sends you a check for $8,000 and your vehicle is fully repaired. Still worth $30,000? No, because of diminished value. In fact, your vehicle might now be worth thousands less.
Now here is the important part: diminished value is real damage that you have the right to recover from an insurance company. Don't let the insurance company tell you otherwise! Insurance companies will rarely tell you that you are entitled to claim diminished value after an accident and some companies will even deny that diminished value claims even exist. When filing an insurance claim you have to keep in mind that insurance claims representatives and adjusters have one job and that job is to settle your claim for as little as possible.
So how do you go about making a claim for loss of value after a car wreck? The first thing you'll have to do is get your vehicle valued by a licensed appraiser. You should be able to have this done for under $100. The appraiser will be able to tell you the difference in value between your vehicle prior to the accident and after the accident with repairs made. The difference is the diminished value. Take this number to the insurance company and include it along with your claim for the cost of repairs.
There is a good chance the insurance company will either dispute the amount of the diminished value claim or refuse to pay it altogether. This is where an attorney could be of assistance. An attorney with experience dealing insurance companies can usually expedite the claims process and can also file suit on your behalf if necessary. That said, because hiring an attorney involves paying legal fees, it might not make sense to hire an attorney in some instances. As a general rule, the vehicle you bring a diminished value claim for should be worth at least $10,000 for hiring an attorney to be worthwhile.
This article is for informational purposes only and should not be relied upon as legal advice. Laws regarding recovery of diminished value vary by state.