How to Claim for the Diminished Value of Your Car Following an Accident
If your car is damaged in an accident, you may be able to claim for the diminished value of your vehicle. Diminished value refers to the loss in market value of your car, even after repairs have been made. Here is a guide on how to claim diminished value following a car accident.
Filing an Insurance Claim
The first step is to file a claim with your insurance company or the at-fault driver’s insurance. Provide details of the accident, repairs made, and costs incurred. Request compensation not just for repair costs, but also for the diminished value of your vehicle. Inform the adjuster that you will be seeking compensation for the diminished value in addition to the cost of repairs.
Have the Vehicle Professionally Appraised
To prove your vehicle has lost value, you need an appraisal from a professional auto appraiser. Choose an experienced appraiser known for doing diminished value reports. They will examine your car and compare it to the market value of similar vehicles that have not been in an accident. The appraisal report will specify how much value your car has lost. This documentation is key for negotiating a diminished value claim.
Calculate the Diminished Value
In addition to the appraiser’s estimate, you can calculate the diminished value yourself. Research the market value of your make, model and year of vehicle before the accident. Then determine the current market value after repairs. The difference between the pre-accident value and the current value equals the diminished value. Use sites like Kelley Blue Book and NADA to find used car values. Be sure to factor in miles driven and overall condition.
Present the Claim to the Insurance Company
Armed with your supporting documentation, present the diminished value claim to the insurance company. Reference your appraiser’s report on how much value your car has lost. Highlight the calculations you made to arrive at a diminished value amount. Demand payment for this lost value in addition to the cost of repairs.
Negotiate Your Settlement
The insurer will likely make a lower initial offer. Negotiate a reasonable settlement for the diminished value. Compromise between their offer and your demand. Point out the irrefutable evidence from your appraiser’s detailed report. If you cannot agree, reject their offer. Hire us so we can negotiate a higher settlement.
Tax Implications
Any diminished value payment you receive may be considered taxable income. Consult your tax advisor on how to properly report a diminished value settlement. You may be able to deduct appraiser fees and other costs from the amount. Keep detailed records if you need to demonstrate how you arrived at the net taxable income.
Diminished Car Value After a Lease
If your leased vehicle is damaged, you may be charged for the diminished value at the end of your lease term. The leasing company calculates how much value the car has lost due to the accident. Review your lease agreement – you may have waived your right to diminished value claims. For a strong case, obtain an appraisal detailing the value loss. Negotiate with the leasing company to reduce your charges.
Selling with Diminished Value
Trading in or selling your car privately after an accident can be challenging. Disclose any accidents upfront and have potential buyers test drive the vehicle. Get a buyer’s guide from your appraiser on how the accident impacts value; share this with interested parties. Set your asking price below market value to attract more potential buyers quickly.
Consult us to determine your eligibility to recover the diminished value.
When Diminished Value Claims Are Denied
In some cases, a diminished value claim may be denied, such as:
Older vehicles with very low market values
Minimal or “cosmetic only” damage – no structural or mechanical repairs
Failure to provide credible documentation like an appraisal
Preexisting damage or poor condition before the accident
States with laws that prohibit diminished value claims
If your claim is denied, ask for a written explanation. Carefully review any reasons for denial. If you disagree with the insurer’s position, consult us about further action.
Recovering Owed Compensation
If your car has decreased in value after an accident, you may be entitled to compensation, in addition to repair costs. With the right documentation, negotiations, and persistence, you can recoup this lost value. Speak to us to validate and fight for a fair settlement or judgment. With the above steps, you can seek maximum compensation and restore the pre-accident value of your car.
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