In the days following an accident, when you are calculating the monetary impact that the accident will have on your short- and long-term finances, you may fail to consider the diminished value of your car. Most people don’t realize that even after repairs, a car that’s been in an accident loses value.
If your car has been damaged in an accident, you may be able to file a claim that covers the lost market value of the car.
What is Diminished Value?
Diminished value is the difference in market price for a car before and after an accident. So if you try to sell your car, but due to the car’s damage, buyers don’t want to pay the market price, then its value has diminished. Even if your car received quality repairs with the original manufacturer’s parts, it typically loses some of its value after the accident.
The reason for this is that there’s no guarantee that the replacement parts are of the same quality as the original ones. So people can’t be certain that the car won’t break down soon after being purchased.
When to File a Diminished Value Claim
Most insurance policies do not allow you to file a diminished value claim against your own insurance company. This prohibits you from getting compensation in cases where you’re at fault for the accident. However, if you were the victim of an accident, you can file a claim against the other driver’s insurance.
How to File a Diminished Value Claim
- Gather documentation: Start by collecting all relevant documentation, including the police report, repair invoices, and photographs of the damage and repairs. It’s a good idea to also collect evidence after every car accident since you can use that to prove you weren’t at fault for the accident.
- Obtain a diminished value appraisal: This is not necessary but it can help your case. You can hire someone to evaluate your car’s pre-accident and post-repair values to determine the diminished value.
- Contact the insurance company: Notify the insurance company of your intention to file a diminished value claim. They will guide you through their specific process and requirements. Though you can contact the insurance company on your own, letting an experienced law firm like Morris & Dewett handle all communications can improve your chances of getting the compensation you deserve.
- File the claim: Follow the insurance company’s instructions for filing the claim, which may include completing a form and submitting supporting documents.
- Negotiate: In many cases, the insurance company will try to negotiate a lower compensation than what you asked for. They may offer a settlement, which you can accept or negotiate for a higher amount.
- Consult with a lawyer: If you are unable to reach a fair settlement, you should consult with a legal team to potentially start a lawsuit.
File Your Diminished Value Claim The Right Way
Filing a diminished value claim can be simple or very complicated. If you don’t want to go through this process alone and risk getting ignored or denied, then contact Morris & Dewett now to get the best guidance possible. Send us a message to schedule a consultation now.