Diminished Value Claim Can Help Ease Car Accident Stress
Did you suffer from a severe car crash recently and feel like your car lost some value? Unfortunately, you may be right. Vehicles often lose some value after an accident, making them harder to sell. Even when they look perfect after repairs, they could lose much of their value. As a result, some might find nobody wants to buy their car after an accident.
What can you do in this situation? A diminished value claim could help you out. These claims provide help for many different concerning situations. Learning about these suits can help you prepare for a case. Or they'll make it easier for you to present a claim to an insurance company.
What Is a Diminished Value Claim?
When you get into a car accident, severe damage is likely to occur. Few people walk away from a crash without some damage to their car. Severe impact problems could even impact the value of your vehicle. In this situation, a diminished value suit may be necessary.
This claim helps to recoup the differences between the value of your car before and after the incident occurred.
This claim helps to recoup the differences between the value of your car before and after the incident occurred.
You may file these claims simultaneously with any liability claims as well. For example, you might file a liability claim for repairing the vehicle to the other person's insurance. However, you can then file a diminished value suit at the same time.
Typically, you can file this suit if your car has lost value after the accident. You can gauge this fact by:
Talking to an auto repair company or car dealer in your area
Making sure they have a licensed to appraise vehicle value
Seeking out a licensed professional if your mechanic lacks this certification
Letting them examine the vehicle for you
Getting a new vehicle valuation from this expert
Noting their opinion and working with other mechanics
Presenting this information to the insurance company
Get multiple opinions of your car value to show its diminished quality. Remember: some insurance companies may dispute your claim. Therefore, you'll need evidence that helps to prove your claim is valid. Photos of the car after the accident can help. Collect as many as possible and present them as needed. Also, gather witness statements and expert testimony for the same purpose.
Before starting a claim, understand that multiples types exist. Each helps in different situations and has varying qualifying factors. Read through each of these types to get a better feel for what is available. And make sure that you file your paperwork correctly for each. Don't worry. We'll discuss the proper filing process for these claims to ensure that you're ready. That step comes later and is consistent with all three claim types.
Claim Types Available For You
Diminished value claims come in three different types. One type provides the most benefits for the average person. The other two claims help in specific scenarios. Understanding all these options helps make it easier for you to find the most appropriate choice for your needs.
1. Inherent Diminished Value
This claim is the most common type of these suits. Simply put, it claims an inherent lost value after an accident. Modern vehicle tracking websites track accident history better than ever. As a result, even a wholly repaired car is permanently affected by a crash.
As a result, this claim remains very popular. Other claims require specific circumstances that may rarely occur. However, it would be best if you understood each choice anyway. Doing so helps to make this process easier and more streamlined for you and your loved ones.
2. Repair-Related Diminished Value
Sometimes, mechanics use poor-quality used parts or perform poor repairs. These mistakes may happen after a car accident or otherwise. Unfortunately, poor factors and bad repairs could permanently affect a vehicle. As a result, its value may diminish in the eyes of buyers.
Thankfully, this claim can help you out. Most repair-related claims occur on higher-end vehicles, like a Mercedes. For instance, a repair firm may use generic parts on your expensive Benz. Doing so may reduce the value of your luxury vehicle. You can then use these claims to get compensation. Mostly, few people ever need to use this option.
3. Immediate Diminished Value
Though rarely used, these claims may help you. They refer to the diminished car value immediately after an accident. People only use this option if they have yet to repair their car. Since most people ultimately improve their vehicles, these suits rarely come into play.
It may benefit you if you plan on selling your car for parts or junking it. However, most liability claims help cover replacement. So instead of getting paid for the diminished value, you'd simply get a new car. That said, some may still prefer this option for their reasons.
Ways These Claims Help You
Diminished value suits provide many unique benefits. Understanding each of these advantages should make your decision easier. Read through each positive to learn more. These ideas include just a few of the most common reasons to pursue this type of lawsuit. Many others exist that we've no room to discuss in depth here.
Liability claims help pay medical bills and lost wages after your accident. However, the diminished value remains a permanent problem. You can't get repairs to increase your car's cost. No special fairy dust will make it magically worth more. However, diminished value suits can help compensate you.
They pay you the lost value difference to compensate for your loss. Insurance companies and car experts calculate just how much you receive. Work directly with them to streamline this process and improve your chances of quick and adequate payment.
Do you plan on buying a new car after the crash? A diminished value suit may help you. For example, your dealer may take less money for your vehicle after a collision. They will likely take this step even after promising you more money. Unfortunately, there's not much you can do except make a claim.
You can then use the extra money for a down payment alongside your vehicle. Doing so helps to cut back on your payments and interest rates. This option works well for those with older vehicles they were planning on trading in for a new car anyway.
You want a healthy and robust vehicle when you get out of the hospital after a crash. But, unfortunately, the diminished value may cut back on its overall cost. As a result, you may develop anxiety, frustration, or other emotional difficulties. Thankfully, diminished value suits help here.
Use this claim to get compensated for your monetary loss. Doing so will help to make your emotional recovery easier. You can then focus better on your physical recovery. Some might even use the extra money from their claim for medical purposes and treatments. You can choose what you do with your compensation money, after all.
Calculating Your Claim Values
Insurance companies utilize a myriad of different tools to calculate diminished value. However, no single or universal method exists. As a result, your claim may confuse you. The diminished value could be less than you thought. After all, the insurance company uses its mechanics to decide your compensation. Your visit to a mechanic gives you an idea of the diminished value. But it is not binding.
That said, you can get an idea of your value using a simple formula. This concept is the 17c Diminished Value Formula. This formula creates a basic understanding of this valuation process. And while you shouldn't consider it universal, your company likely uses a similar system.
That said, you can get an idea of your value using a simple formula. This concept is the 17c Diminished Value Formula. This formula creates a basic understanding of this valuation process. And while you shouldn't consider it universal, your company likely uses a similar system.
So let's break it down, step-by-step, to make it easier for you to get a grip on it.
Step One: Valuing Your Vehicle
Insurance companies start by valuing your vehicle. Most follow a pretty basic process. Important note: your car value is not the purchase price. Many make this mistake and end up quite disappointed. The value estimated includes your car before and after the accident. Various third-party tools assess this process for you. For example, you can:
Visit a licensed vehicle appraiser or:
Find the newest Kelley Blue Book online site
Seek out your car's make, model, and year
Input the mileage into the tool
Add how much the damage costs to repairs
Use online tools to get immediate updates to your value. However, print editions help if you have one available. Don't assume this value is infallible, though. Talk to a mechanic or a dealer to get their estimation. Keep in mind your insurance company performs these same steps. But they will use different mechanics or adjusters. As a result, your value could be pretty different from theirs. Their estimation will be used when creating your claim value.
Step Two: Calculate the Base Loss of Value
After finding your car's value, insurance companies calculate the base loss of value.
Most use a very simple cap: 10% of your car's value.
For example, let's say your insurer valued your car at $30,000. They multiply that number by 0.10 (10%) to get $3,000. This number indicates the maximum value of your diminished value suit.
However, they're not likely to pay you that much money. Therefore, they do what they can to minimize their payout. This step helps to create a more accurate payment. Unfortunately, you may end up with less money than expected. Let's move on to step three to see what other valuating steps occur.
Step Three: Diminishing Payments With a Multiplier
After estimating a base loss of value, your insurance company applies a damage multiplier. What does this term mean? In essence, it values your car damage and uses this number to adjust your payout. This method breaks multipliers down into five levels. It starts at 0.00, which means no structural damage. Then, multipliers increase by 0.25 up to 1.00. This high level indicates severe structural damage.
So, let's say your base loss of value is $3,000. Your insurance company gives you a 0.25 multiplier (minor damage to structure). They apply this multiplier to your base loss of value ($3,000 x 0.25) to get $750. They will pay you that much money for your claim. Severe structural damage would get a multiplier of 1.00, meaning you'd get $3,000 for repairs.
Unfortunately, your insurance company is not done yet. They take one more step to gauge your payout. They decide on a mileage multiplier and use it to diminish your payout further. This process makes sense from their perspective. Insurance companies cannot pay more than is fair. However, car owners may find this process frustrating to experience.
Step Four: Calculating Your Mileage Multiplier
Mileage multipliers apply to the value earned after applying your damage multiplier. They vary based on each insurance company. Typically, insurance gives a 0.0 rating to all vehicles of 100,000 miles or more. They increase the multiplier in descending order every 20,000 miles. Therefore, they provide a 1.00 multiplier to cars between 0-19,999 miles.
As a result, you'd get the maximum $3,000 if receiving severe structural damage before hitting 20,000 miles. You'd receive $2,400 (on an 0.80 multiplier) between 20,000-39,999 miles. After that, you'd get $1,800 (0.60) for 40,000-59,999 miles, $1,200 (0.40) for 60,000-79,999, and $600 (0.2) for 80,000-99,999. Those values represent the maximum possible payout for each mileage level.
Filing Your Claim
You follow specific rules when making this type of claim. Your state may have slightly different guidelines. However, the steps below should help you out. Make sure you work with a claims professional on each step. Doing so helps to protect your rights and minimize disputes.
Proving Fault – Research your case and find out who was at fault. Talk to the police at the crime scene and witnesses. Take photos of the accidents and get statements from auto professionals. The at-fault party's insurance will cover your claim. Get their information and submit a claim directly to their policy. If necessary, a lawsuit may be required to assign fault in these cases.
Understand Your Legal Situation – Talk to legal professionals about your case and what your state expects. You can also investigate your state's official website. Find their Division of Insurance and search for information on your claim. Here, you can learn what rules and guidelines to follow. These guidelines include when you should submit your claim. Most states want claims submitted ASAP to minimize your potential confusion.
Contact the Proper Insurance Companies – Immediately contact the at-fault party's insurance company. They'll tell you what they need from you, including various types of paperwork. What if the driver had no insurance or poor insurance? Ask your insurance company about uninsured coverage. This policy protects you in these cases. It will pay for your diminished value and provide you some compensation.
Gather Your Paperwork – Collect your insurance information and all evidence for your claim. Then, contact the insurance company and deliver them via mail or scan and email them. Also, send them your car's estimated diminished value. Next, work with a mechanic or other licensed appraiser to get this value. Understand that they will use this information but may have a varying diminished value payout.
File the Claim – Gather all paperwork, finish it properly, and send it to the insurance company. Answer any questions they ask promptly. Wait for their reply. You may wait several months to hear a response. Some cases may take just weeks to process, though. Patience is critical in either case. Call them every few weeks if you don't hear a response. They're legally required to update you by law. Talk to an attorney if they don't.
Consider an Appeal – Were you denied your claim? Or was your claim lower than anticipated? Consider an appeal. You can present your case directly to the insurance company and show you need more compensation. Understand that appeals rarely work in these cases. The insurance companies use techniques hard to argue against successfully. That said, you might win if you can prove the damage worse than they'd calculated.
Making Your Claim Properly
Don't attempt this type of claim without help! Legal experts can give you a better understanding of this unique option. They'll prepare your case, finish your paperwork, and guide the whole process. Of course, they will also make sure that you're okay during every step of the way.
You may find some of these steps emotionally challenging. After all, you might struggle to relive the accident when filling out the forms. Make sure you feel comfortable handling all of these steps. If not, talk to someone who can handle them for you instead of doing them yourself.
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