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does insurance have to pay for diminished value after an auto accident?
Any time you are the victim of another’s negligence you have the right to collect for everything you lost including your car’s lost value. If the insurance company of the at-fault party gives you a hard time and doesn’t want to pay you, make a formal demand of the person that caused the damage, as they are the one ultimately responsible for making you whole. If the at-fault party has good insurance that willing pays or bad insurance that does what it can to get out of paying, it’s not your problem. Either way, the at-fault party is responsible to make you whole for lost value to your car, even in cases where they don’t have insurance.
In claims situations where your own insurance company is paying such as an at-fault accident that you caused, it is more difficult to collect diminished value because most people purchase an insurance policy that has a written diminished value exclusion in it. Insurance companies rely on this exclusion to get them off the hook, but they can’t get off so easy. If you have the car inspected after the repair is complete the inspector will usually find deficiencies in the repairs for which you have a right to be compensated. These are not always the fault of the repair shop, but often they are. Here’s an example where you experience a loss regardless of how well the shop performed the repair:
As your car was being built it was immersed in an electrostatic bath of anti-corrosion coatings. This was done before any parts were put on the car. But, carthodic dip tanks are not available in aftermarket repair shops. Even if they were, it would not be economically feasible to disassemble a car, replace the parts that were damaged, dip it, then put the entire car back together again. Since they can’t dip the car, repair shops spray anti-corrosion coatings onto the panels they replace.
But this sprayed technique is inferior to a dipped application of anti-corrosion coatings. Because it is not as good, and because consumers are entitled to repairs that restore their cars to preloss condition, diminished value has become the tool to make up the difference – though rarely do insurers call it a diminished value payment.
The burden to prove this loss is on your shoulders. You will probably have to pay for the services of a post repair inspector to get the numbers you need to substantiate your loss. Most charge in the $300-$500 range. But you should be able to recoup money you’ve paid for this service. It is not uncommon for the lost value to be 30% or more of the car’s retail value.
I would advise against using free diminished value services that can be found on the Internet. Insurance companies know these companies will not come to court to testify on your behalf, so they have no motivation to pay you based on these free reports.
Insurance companies pick and choose their fights and they will size you up with regard to your ability to force them to pay. If they think you have a case and can afford to retain a good lawyer, they will probably pay you without much fuss. If they think your case is weak or you can’t retain good counsel, they will most often drag their feet and refuse to pay until they are made to do so.
Depends on your state and/or policy. Many times there is NO diminished value after a loss, (i.e; rear bumper is dented and the unit is replaced with a new one) and almost always the amount of the loss in value is much, much lower than the owners expect.
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Old claims dawg
No. In theory they pay to restore the vehicle to operating condition. All parts that were damaged should be returned to their useable condition. That also means any body panels or trim need to be in an undamaged condition. This should bring your vehicle back to it’s Blue-Book value.
They are not responsible for any value adjustment that the accident caused. You could try to sue the other party of the accident, but it better be a unique car to have a snowball’s chance in hell of winning.
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No, only the market value of the car at the time of loss, adjusted for condition, assuming they are taking responsibility for your losses.
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It depends on each state. In CA case law was passed years and years ago that if a vehicle is repaired to pre-accident condition, there is no compensation for diminished value.
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Depends on the state, but if you are financing, you should always consider Gap Insurance. That way, if you drive of the lot, and the car automatically takes a 30% decrease in value, and you get totalled, you don’t pay the bank- the insurance covers the difference in value vs. what you owe.
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A properly repaired car does not have diminished value, and it may actually be worth more. Many people take advantage of the "for a few dollars more we paint your whole car" offers, which may add a couple of thousand dollars in value.
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GA law (Mabry vs State Farm) requires that ALL claims be considered for diminished value. SC law states the claimant (person not at fault) is entitled to DV if they request it. GA is the only state where it is mandatory for claimants and insureds.
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Claim handler
Any time you are the victim of another’s negligence you have the right to collect for everything you lost including your car’s lost value. If the insurance company of the at-fault party gives you a hard time and doesn’t want to pay you, make a formal demand of the person that caused the damage, as they are the one ultimately responsible for making you whole. If the at-fault party has good insurance that willing pays or bad insurance that does what it can to get out of paying, it’s not your problem. Either way, the at-fault party is responsible to make you whole for lost value to your car, even in cases where they don’t have insurance.
In claims situations where your own insurance company is paying such as an at-fault accident that you caused, it is more difficult to collect diminished value because most people purchase an insurance policy that has a written diminished value exclusion in it. Insurance companies rely on this exclusion to get them off the hook, but they can’t get off so easy. If you have the car inspected after the repair is complete the inspector will usually find deficiencies in the repairs for which you have a right to be compensated. These are not always the fault of the repair shop, but often they are. Here’s an example where you experience a loss regardless of how well the shop performed the repair:
As your car was being built it was immersed in an electrostatic bath of anti-corrosion coatings. This was done before any parts were put on the car. But, carthodic dip tanks are not available in aftermarket repair shops. Even if they were, it would not be economically feasible to disassemble a car, replace the parts that were damaged, dip it, then put the entire car back together again. Since they can’t dip the car, repair shops spray anti-corrosion coatings onto the panels they replace.
But this sprayed technique is inferior to a dipped application of anti-corrosion coatings. Because it is not as good, and because consumers are entitled to repairs that restore their cars to preloss condition, diminished value has become the tool to make up the difference – though rarely do insurers call it a diminished value payment.
The burden to prove this loss is on your shoulders. You will probably have to pay for the services of a post repair inspector to get the numbers you need to substantiate your loss. Most charge in the $300-$500 range. But you should be able to recoup money you’ve paid for this service. It is not uncommon for the lost value to be 30% or more of the car’s retail value.
I would advise against using free diminished value services that can be found on the Internet. Insurance companies know these companies will not come to court to testify on your behalf, so they have no motivation to pay you based on these free reports.
Insurance companies pick and choose their fights and they will size you up with regard to your ability to force them to pay. If they think you have a case and can afford to retain a good lawyer, they will probably pay you without much fuss. If they think your case is weak or you can’t retain good counsel, they will most often drag their feet and refuse to pay until they are made to do so.
References :
http://www.safecollisionrepairs.com/diminished_value_slideshow/index.html
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