WHAT IS DIMINISHED VALUE
May 5, 2018
Diminished value is a condition that applies to a vehicle that has been damaged, whether by accident, water or otherwise. Such a condition exists where a properly repaired vehicle has a history of repair and such history alone diminishes the vehicle’s value after the repair. The best way to understand diminished value is through the following example:
A woman driving her SUV was in an accident. Fortunately for her, she was not hurt. However, her car required $15,000 in repairs. The insurance company paid to have her car properly repaired. The only problem was that those repairs appeared on CARFAX®. She then went to see what she could sell or trade-in her SUV for. What she found was that identical vehicles with no repair history were selling for $25,000. Her SUV though was only worth $15,000 because of the repair history because buyers would only pay her a discounted price because of the repairs to her vehicle. In other words, her SUV’s value went down by $10,000 even though it was repaired properly.
Now, the woman has a claim of $10,000 for diminished value. Diminished value is collectible against the third party insurance in most cases, and in some cases, from the first party insurance. This value is collectable even though there is nothing mechanically wrong with her SUV. It is collectable even if she does not want to sell or trade-in her vehicle.
So, that woman called Wattel and York. We jumped right on the case and worked with the insurance adjuster. We got an independent appraiser to value her car and he documented a market value drop of $10,000 due to the repair history. We worked with the insurance adjuster until he finally said he was going to offer her nothing. We then filed suit. After we filed suit, the insurance company gave up. Within 10 business days that insurance company issued a check for $10,000.
Of course, results vary. The facts, the specific insurance policy, the insurance company and the insurance adjuster play large roles in determining what can be collected and the speed of collection. However, having full-time team members that are knowledgeable about and dedicated to diminished value makes a big difference in getting the best possible recoveries for people.
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