Insurance companies routinely pay for repairs to vehicles following collisions, in the context of liability and collision policy claims. There may be disputes about what damages were caused in the collision, or whether the insurance company will authorize Original Equipment Manufactured (OEM) parts versus after market parts, etc…, but these issues generally get worked out between the body shop, the owner and the insurance company; and the wrecked and repaired vehicle is put back into service.
That wrecked vehicle is immediately worth less in the marketplace due to the collision and repair. Purchasers place greater value on unblemished vehicles, all other things being equal. “Diminished Value” is a form of damages most people fail to fully evaluate and negotiate for with the insurance company as part of the repair and insurance payment process.
In general, newer vehicles suffer the highest percentage of diminished market value due to being wrecked and repaired, compared to older vehicles that have already suffered depreciation through ordinary wear and tear. The nature of the damages and quality of repairs weighs in on the extent of diminished value as well. A vehicle that suffers a bent frame and other significant damage subsequently repaired will be diminished in value much more than a vehicle that suffers superficial body and/or bumper damage.
The only way to determine the extent of diminished market value is to have your vehicle formally evaluated by a professional. Most vehicle dealers will tell you verbally how much your vehicle is diminished for the purpose of trade if you try to trade it for another vehicle, or sell it to a dealership after disclosing previous damage and repair. However, most dealers are unwilling to draft a formal report to assist you with diminished value negotiations with the insurance company. They simply don’t like to get involved in these kinds of disputes.
David Montanaro of Southern Automotive Consultants assists South Carolina and Georgia vehicle owners with diminished value evaluations and reports for negotiation. Insurance companies will pay for diminished value with a proper evaluation and report. However, absent a formal report, while some carriers will pay you a small amount ($300.00 to $500.00) for vehicle diminished value, they won’t pay you the fair amount of your diminished value loss. Diminished value claims can be in the tens of thousands of dollars on certain high dollar vehicles. In today’s vehicle market, with many vehicles priced in excess of $40,000.00, high diminished value claims are common. Southern Automotive charges a flat fee for the evaluation and report. Once complete, the report is then used for negotiations with the insurance adjuster on the issue of diminished value.
Speak Now, or Forever Hold Your Peace
If you fail to mention it during the claims process, your insurance adjuster is trained to remain silent, as you drive away with your repaired vehicle that is worth less due to the damages and repair; and that is not fair to you. You won’t discover your true loss until you try to trade in or sell your vehicle and value is discounted by the buyer, due to the previous collision. Carfax.com has information on most vehicles.
Disclosure is mandatory. The failure to disclose a prior collision and repair subjects you to potential civil liability to the buyer. So prior to signing any kind of “release,” conduct and document a complete diminished value evaluation; and have the data available for the insurance adjuster.
The McKnight Law Firm assists vehicle owners with diminished value claims, as well as bodily injury and other claims from loss arising from vehicle collisions. We would be honored to assist you, your friends, or family members who have suffered harms and losses in a vehicular collisions.