Diminished value in insurance context refers to the car’s loss of resale value after an accident or damage. Even a perfectly repaired vehicle can still lose value. This is because potential buyers want a new vehicle for the one that was repaired and damaged previously. It does not matter whether you are entitled to recover diminished value of the vehicle. Remember that some states treat recovery differently as compared to others. If you want to collect a diminished value, you should submit a claim to your insurance company. If they do not pay the claim, you can sue them in a court of law.
Learning the basics
The major types of diminished value are three: immediate diminished value, inherent diminished value, and repair-related diminished value. Immediate is the difference between the resale value of the vehicle before the accident and its resale value after the accident. However, this valuation is not important as you will need to repair your car at the expense of the insurance company before you sell it. The type of valuation you are likely to use is inherent diminished value. This is the difference between the resale value of your car before an accident after repairs. On the other hand, repair-related diminished value originates from loss of value as result of faulty or incomplete repair work.
Filing an insurance claim
After vehicle repair, an appraiser will compare the value of your car to the original value before the accident. Thus, the car must be repaired before being appraised for Diminished Value Claim. Ensure you agree with the insurance company as to where you will take the vehicle for repairs. If the repairs are unsatisfactory, you can file the first-party claim for poor repairs.
Review your insurance policy
If the vehicle is not well repaired, before you file any claim; ensure you thoroughly review your insurance policy. Remember that policy is a contract you have with the insurance company. Therefore, it needs to state how the insurance policy covers the repair-related diminished value claims. You need to contact your insurer with both post-accident repair and pre-accident values. You should then ask for compensation for diminished value of your car. Usually, insurance companies resist paying this amount. Therefore, you need to be patient as you sue them in court. Although it may take time, it is worthwhile as you can get a fair compensation.…