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Diminished Value Claims

What is a Diminished Value on a vehicle?

By definition, diminished value is the loss of a vehicle’s value after an accident. If your vehicle has been in an accident, got badly repaired or subject to extreme weather conditions, it is likely to have a low resale value. Buyers will not prepared to pay the full price of your car! A lot of people relate diminished value to “aftermarket parts”. Well, this is not the only reason behind diminished value. Even cars that are repaired at authorized workshops with original parts will be subject to diminished value. That is because your car was in an accident or severely damaged. This fact alone is enough to destroy your vehicle’s overall value.

Different types of Diminished Values

There are several different types of diminished values:

  • Immediate diminished value represents the difference between a car’s original price and the trade-in cost, before and after an accident.
  • Inherent diminished value believes that the vehicle (after an accident) was repaired. The inherent diminished value considers the fact that the vehicle was in an accident. Now, the difference represents the amount the owner would have got if he had tried selling the car before the accident.
  • Repair Diminished value is the amount lost by the owner after a repair. The different attributes of the kind of products used during the repair. With low-quality products, the vehicle’s value is bound to drop significantly.

It is quite clear that diminished value has an impact on your vehicle at different levels. The moment you understand this, you will be tempted to make a diminished value claim.

Understanding Diminished Value Insurance Claim

By definition, diminished value insurance claims represent the amount of money you request from a car insurance service provider, to compensate the above-mentioned differences. The claim covers the difference between your car’s present value (after an accident and repairs) and its original price (before an accident and without any repairs). The diminished value claim can easily sum up to several thousand dollars for brand new vehicles.

Most car insurance service providers take care of diminished value insurance claims. The final compensation depends on many factors. In most cases, it depends on the vehicle’s condition, your state, and the current circumstance. Every state has a unique set of terms and conditions. The policies are defined by the local insurance companies. Some insurance companies don’t pay diminished value claims. That is why vehicle owners should understand the scope of their insurance policies. At all times, it would be wiser to buy insurance coverage from providers who support diminished value claims.

Most best auto insurance company pay after considering who is responsible for the damage. In certain states, diminished value claims are not paid.

Working before and after an incident

If the accident was due to your fault, the diminished value claim will not be paid. It will be able to claim against your very own vehicle insurance policy. Very few insurance service providers allow such claims. In such tricky situations, you must approach a lawyer and learn more about your chances of getting paid.

If the accident was caused by another car, you will be able to make a diminished value claim from the 3rd party insurance service provider. When another person is responsible for the damage, you will be able to pursue a legal case against them or the insurance service provider. To be on the safer side, you must discuss the situation with your car insurance company. Check if they can save you from all the trouble.

If the accident was caused by an uninsured motorist, you can make a diminished value claim using the uninsured motorist property damage coverage policy. Once again, you must accept the fact that diminished value claims are strongly controlled by state policies. The process of making a claim and receiving money will not be easy. For a successful claim, you should have a diminished value appraisal. The car’s value, before and after the accident should be evaluated.

Getting Paid for Diminished Value

If you want the diminished value to be paid, you should perform the following steps:

  • You must approach your car insurance service provider and check if they offer diminished value coverage.
  • Read through your current car insurance policy. Check if diminished value claims are provided.
  • If your car insurance policy doesn’t have diminished value claims, you must buy a secondary policy. Once again, learn more about the possibilities and limitations in your state.

Making a Diminished Value Claim

The entire process begins with you understanding the diminished value of your vehicle after an accident. If you want to make a quick, successful diminished value claim, you should be aware of your vehicle’s worth. If your vehicle is new, it will be “good” value and your diminished value claim will make lots of sense (especially if you are planning to go to the courts for the payment).

There are two ways to judge the diminished value.

  • The best way to verify your car’s diminished value is by going through online websites like Kelley Blue Book or Edmunds.com. In these sites, you must key in your vehicle’s details and stats about the accident. Next, you should ask the car dealer to give you an estimate. This way, you will be able to decide if a diminished value claim is worthy or not. Always remember, the car dealer’s quote wouldn’t be the best and final. That is why you should understand the state policies and approach several car dealers.
  • There are many companies that specialize in finding the diminished value of vehicles. You must approach these companies and ask for a quote. This would be a final, reliable figure. You can use this number while approaching your insurance service provider. At all times, verify if the evaluator is recognized and qualified to do the job.

Making the Claim

This is considered as a very tough process! Requesting your insurance company or the 3rd party insurance service provider to compensate your diminished value claim can be tricky. You may have to schedule several meetings and ask many times. Remember, the entire process is a “negotiation”. For a safe and successful deal, you must have sound negotiation skills. According to some insurance service providers, there will be no such thing as a diminished value claim. That is why many car owners fight for their diminished value claims. They approach lawyers and run cases to get several thousand dollars. If your car is not worth 10,000 USD, there is no point in filing a claim or even hiring a lawyer. For old cars, you may end up spending lots of unnecessary money. The cost of hiring a lawyer will not make any sense.

The Conclusion

Diminished car value due to the accident is a common claim raised by 40% of Americans. There are so many calculations and theories behind these claims. If you want to experience a successful diminished value claim experience, you should begin with the formula, evaluate your loss and hire a lawyer. With experience help and an accurate diminished value appraisal, you will have a better chance of getting some money. Indeed, this is a long process and you should learn to remain patient.

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