After your vehicle is involved in an accident, the smart move is to have an appraiser take a look at the car or truck. Your goal is to determine what the vehicle’s value is now that the damage is done. This can set the stage for preparing a car diminished value claim. Before you decide this is the way to go, it pays to know more about this type of claim and what you can expect. The answers to these four questions will help you make the best choice.
What is Diminished Value?
Diminished value is the difference between what the vehicle was worth before the damage occurred and what it’s worth in its current state. The current state refers to the car’s condition after the event and not after the repairs are made.
Calculating the diminished value involves taking those two figures and subtracting the current value from the previous value. That resulting figure represents the financial loss that your car as an asset has sustained.
Who Can File a Diminished Value Claim?
Not everyone can file this type of claim. In order to be eligible for this type of compensation, you must not have any responsibility for the accident. It must be clear that it took place because of the actions or choices of another party. If it can be proved that you are partially responsible for the accident, the insurance company will reject your claim immediately.
The claim will be filed with the responsible party’s insurance provider. In the event that the one who caused the accident has no insurance coverage, you can file the claim with your own provider. This is true if your insurance includes provisions related to uninsured motorists. If you have any doubts about the ability to file, have a word with your agent.
Is a Diminished Value Claim Right For Every Situation?
While making use of the car diminished value as part of a claim does make sense in some cases, it won’t do much for others. The key has to do with the amount of value the vehicle lost.
Generally speaking, a car that is not considered vintage or classic and has a high amount of mileage on the engine is a poor candidate for this type of claim. If the car was not in the best shape prior to the accident, the loss in value may be so little that it’s not worth filing the claim. You’ll find that may providers have resources to help their clients decide if this type of claim is worth it.
How Much Can I Expect to Get If The Claim is Approved?
If you think that the compensation will cover the entire diminished value, don’t feel alone. Many people have this misconception. A more likely scenario is that you will receive something to partially make up the difference, but not enough to cover it entirely.
Providers typically offer an amount that can be as low as 10% or as high as 25% of the appraised diminished value. Check with the insurance company who will receive the claim. That will help you understand the formula they will use and what the best possible outcome would be.
There’s more to learn about diminished value and how it can be put to good use. The appraiser can provide you with some additional facts as well as refer you to reputable resources that will explain things in more detail. While the appraiser cannot provide you with advice of what to do, the things you learn can help you make a decision that’s in your best interests.