If you get into a car accident, you may qualify for insurance benefits to reimburse you for many different financial damages. Car insurance is meant to make a victim whole again – to put the victim back in the financial state he or she would have been in had the accident not happened. This includes reimbursing you for the diminished value of your vehicle after an accident.
What Is the Diminished Value of a Vehicle?
No amount of repairs can restore a crashed vehicle to the value it bore before the car accident. There is a stigma against vehicles that have been in accidents, even after they have been repaired. Despite the repairs bringing the vehicle back to like-new condition, the fact that the vehicle has a crash history will bring down its resale value on the market.
How Do You Seek Compensation for Diminished Value?
As the owner of a damaged vehicle, you have the right to seek insurance benefits for diminished value. If you did not cause the car accident, the other driver's insurance company is responsible for paying for the diminished resale value of your vehicle. Otherwise, you may be able to seek this type of compensation from your own insurance provider if you have collision or comprehensive coverage.
Your own insurance company most likely will not want to pay you for the diminished value of your vehicle. Instead, it will only want to pay you for the repairs necessary to restore your car. First-party payments against collision coverage will only pay for diminished values in very limited circumstances. Tell your insurance company that you do not consent to allow them to seek reimbursement from the other driver’s insurance company until you have first been compensated for your diminished value.
If the other driver caused your car accident, notify his or her insurance company that you will be filing a diminished value claim and that you will not accept a settlement until this part of your property claim has been resolved. Follow the insurance company’s instructions for filing your claim and providing proof of your losses. Do not resolve your case, however, until you have spoken to an attorney.
How Does an Insurance Company Calculate a Diminished Value Claim?
Before you can recover compensation for the cost of the diminished value of your vehicle, you must prove that you have lost resale value. The insurance company will request evidence of this loss. You may be able to obtain evidence from a mechanic shop or using an evaluation tool such as Kelley Blue Book to show what your car was worth pre-crash compared to what it is worth now.
For example, if your vehicle would have been able to sell for $10,000 before the car accident, but will now only sell for $6,000, you will need evidence proving the $4,000 difference. Do not forget to combine this with the costs of your vehicle repairs. If it will take $2,000 to restore your vehicle, for instance, your full claim would be for $6,000; the cost of repairs plus the diminished market value of the vehicle.
Insurance companies want to protect their bottom lines by devaluing the claims they receive. You may struggle to negotiate a fair settlement for the diminished value of your vehicle from the insurance company handling your case. The insurer may undervalue the pre-crash resale price of your vehicle in its initial settlement. This is why it is important to speak to an attorney before you sign anything from the insurance company.
Contact an Attorney for Help
You may need to hire a car accident attorney to investigate the facts of your case and help you negotiate for a fair settlement from an insurance company for the diminished value of your vehicle. It often takes an expert to review the case and substantiate a diminished value claim. Hiring a law firm gives you the resources and professionals to successfully investigate and resolve a diminished value case in Dallas.