What Is Diminished Value?
Diminished value refers to the difference in your vehicle’s market worth before and after a wreck. Before a collision, the vehicle may have been in good or excellent condition, with no history of substantial repairs. A collision upends the vehicle’s status and can tremendously impact the car’s resale value, especially if it was worth a lot prior to the crash.
For instance, say you have a 2021 Porsche 718 Cayman that was in pristine condition. A collision damaged the vehicle’s frame, windshield, and side paneling. Before the accident, you might have resold the car for $61,000. Now, it’s worth $37,000, even though it has been repaired. Since the collision substantially reduced the value of your vehicle, you could claim the difference in a diminished value claim.
Va. Code § 46.2-1600 allows vehicle owners to seek damages from the at-fault driver’s insurance company for the reduced value of their cars or trucks. However, it is important to note that not every vehicle will qualify. If the damage was relatively minor, or your car did not have a high resale value before the crash, a diminished value auto claim may not be worth pursuing.
Ask The Car Crash Experts
Daniel Jarman, Vice President of Operations
“In Virginia and many other places, a diminished value claim occurs when your vehicle is damaged and repaired, but the repaired value of your car is less than the typical resale value of another car that’s never been damaged. In Virginia, it’s a difficult process to obtain a diminished value claim or payment against another person’s insurance company. It’s not very frequently used, but it is available to you if somebody else damages your vehicle, and you can present it with experts.”
How To Determine Diminished Value
There is no fixed industry standard for calculating the diminished value of your wrecked vehicle. Instead, you must rely on external sources or a vehicle appraiser. Here are a few options you can use to obtain a reasonable estimate.
Book Value Resources
Edmunds Car Value and Kelley Blue Book are go-to resources for consumers seeking to determine the resale value of their cars. Both sources allow you to enter various facts about your vehicle, including its age, model, features, location, and condition. You can also include details about prior car accidents the vehicle was involved in, damages sustained, and repairs made.
Once you provide the information, you will receive an estimated resale value. You can then obtain a comparison estimate with much of the same details, assuming the accident never occurred. The difference in the two results is a general estimate of the vehicle’s diminished worth.
Professional Appraisal
A professional appraisal may be more credible than what you obtain from web sources, especially if the appraiser is licensed and certified. A professional will review your vehicle’s condition and accident history to evaluate its diminished worth. However, seeking a professional appraisal can be costly, so you may want to perform an initial online estimate to determine whether the reduced value is substantial enough to pursue.
Insurance Company Calculations
Insurers rely on proprietary databases to calculate the approximate value of vehicles. Since the database is not publicly available, there is no way to tell whether the company’s insurance adjustor will use the correct information. However, you can compare your results with those of the insurers to determine whether they are reasonable. Our attorneys can help you negotiate a fair settlement for diminished value based on the insurer’s and your estimates.
How To File a Diminished Value Claim in Virginia
Take these steps if you think you have a valid diminished value claim for your vehicle.
1. Tell the Insurer You Want Compensation for the Diminished Value of Your Vehicle
Most insurers will not inform you that you can request diminished value damages when filing a claim. Instead, they will focus on repairing your vehicle and compensating you for medical expenses or lost wages. It is up to you to tell them that you also want to request compensation for the diminished value of your vehicle.
Note that having a general estimate of your car’s diminished value is very helpful before making the request. That way, you will know whether the vehicle’s worth has decreased and by how much. You can identify immediately if the insurer does not offer you fair compensation.
Sometimes, a diminished value claim does not make sense. For instance, if you are driving an older vehicle that was not worth much before the accident, you will probably not see much compensation from your claim, if any. However, a new vehicle with a high retail value or a collector automobile might see a higher diminished value claim.
2. Understand Your Insurance Policy Provisions
Some insurance policies provide specific provisions for assessing diminished value auto claims. Your insurer may allow you to request an outside appraisal that your policy covers. An insurer-provided appraisal can save you money and accurately estimate your car’s diminished value.
However, not all insurers offer paid appraisals, and you may have to pay for one out of pocket or rely on its estimates. If you decide to pay for the appraisal and push for a higher claim, the insurer can deny it and force you to sue to recover damages. Whether you decide to go forward with a lawsuit or not is your decision, but if the difference is just a few hundred dollars or so, it may not be worth taking to court.
3. Accept a Settlement or Sue
Your insurer may offer you a settlement for a diminished value claim. You can accept their offer or try to negotiate more compensation. Negotiation may be easier if you have evidence to support your claims or an attorney to assist you.
If you are unhappy with the settlement offer and the insurer refuses to negotiate, your alternative is filing a lawsuit. However, litigation may be expensive, so carefully evaluate whether it makes economic sense before proceeding. Our attorneys can help you make a good decision based on the specific circumstances of your case.
An Experienced Car Accident Attorney Can Help
If you are considering a diminished value claim following a vehicle collision, consider speaking with a knowledgeable car accident attorney who can advise you of your options. The Car Crash Experts at Cooper Hurley Injury Lawyers have extensive experience handling all kinds of crashes, including car accidents, truck accidents, and bus accidents.
We are standing by to ensure you know your legal rights and help maximize the value of your claim. Call (757) 333-3333 or reach out online to schedule your free case evaluation now.
