Diminished Value Claims

Diminished Value is an unexpected and sudden loss in value due to a specific occurrence. Any vehicle that has been in an accident immediately suffers an inherent reduction in value, even when repairs are performed correctly. This loss may be recovered as part of a property damage claim. This is because the courts recognize that any vehicle with an accident history will sell for less than it would have without any history of damage. Most consumers don’t want to buy a car that’s been in an accident, and if they do, they expect to get it for a much lower price.

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How much does an accident diminish a car's value?

The amount of Diminished Value of a damaged and repaired vehicle depends upon several factors including: the pre-loss value of the vehicle, the nature and severity of the damages and the cost, manner and thoroughness of the performed repairs. When a vehicle is in an accident, it loses its greatest value just after the actual impact or occurrence. During the dismantling, repair, installation and painting of replacement parts, the value is slowly restored as the repairs progress. 

In most cases, vehicle damage history follows the vehicle through the VIN. Accident claims, theft and recovery, even total losses are tied forever to the VIN of the car. Even in minor crashes, these instances in a vehicle history report can lead to a loss in value especially at trade in time or if you were to sell the vehicle independently. The more significant the damages, the greater the loss in value. The poorer the repair quality, the less recovery of the vehicle’s original and pre-loss value. 


Additional information

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How will damage history affect my trade-in or the sale of my vehicle?

Under most state laws, every auto dealer is to disclose and accident history on a vehicle to a potential buyer. To be in compliance, and avoid lawsuits, they are often careful to ask regarding the damage history from the prior owner and may even have the owner sign an affidavit. After disclosure, most buyers are not willing to pay the same amount for a vehicle with an accident history as they would for the same vehicle without an accident history.

How Do I Recover All My Losses?

The key to recovering all losses owed is to know just what it is that is owed to you. Having an in-depth visual inspection of the damaged/repaired vehicle and accurate assessment of your remaining damages prepared for you and understanding the necessary steps in the recovery process is paramount. Providing a detailed report with your claim will enable the insurer a clear understanding of your remaining loss and facilitate a more timely settlement.

Can I disagree with the amount of loss?

YES. Vehicle owners have the right to disagree with any assessed amount of loss. Depending on the policy and state law, provisions are provided for dispute resolution. Of course, before one can make a determination if the insurer’s offer is reasonable or not, they will need a valuation of their own for comparison.

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