How to File a Diminished Value Claim? (PDF)

When your car is involved in an accident, its value can take a hit, even after repairs. This phenomenon is known as diminished value. In this comprehensive guide, we’ll walk you through the process of how to file a diminished value claim, ensuring you’re equipped with the knowledge and steps to recover the loss in your vehicle’s worth. Whether you’re a car owner looking to understand the nuances of diminished value claims or someone seeking to navigate the complexities of the process, this guide has got you covered.

Understanding Diminished Value Claims

After an accident, your car’s market value might decrease, even with thorough repairs. Diminished value is the discrepancy between your car’s pre-accident and post-repair market values. By filing a diminished value claim, you aim to recoup the money you’d lose if you were to sell your repaired car, which is valued lower due to its accident history.

Types of Diminished Value

Diminished value claims fall into three categories:

1. Immediate Diminished Value – When your vehicle’s value drops after an accident and before repairs, this type is usually used in court.
2. Inherent Diminished Value – Assuming optimal repairs are performed, this is the most common type, referring to the decrease in your car’s value due to its accident history.
3. Repair-Related Diminished Value – Subpar repairs, such as using non-OEM parts, can further depreciate your car’s value. This claim accounts for additional losses.

Calculating Diminished Value

Most insurers utilize the 17c Diminished Value Formula to calculate payouts. The 17c Diminished Value Formula is often criticized for several reasons, which contribute to the perception that it might not be an accurate or fair way to calculate the diminished value of a vehicle after it has been repaired following an accident. Here’s a simplified version of the calculation process:

1. Determine your car’s market value using trusted sources like NADA or Kelley Blue Book.
2. Apply a 10% cap to that value, representing the maximum payout from your insurer.
3. Apply a damage multiplier based on the extent of damage. Multipliers range from 0.00 to 1.00.
   

   Multiplier	Damage level
   1.00	Severe structural damage
   0.75	Major damage to structure and panels
   0.50	Moderate damage to structure and panels
   0.25	Minor damage to structure and panels
   0.00	No structural damage

4. Apply a mileage multiplier to account for mileage on your vehicle.
   

   Multiplier	Damage level
   1.00	0-19,999 miles
   0.80	20,000-29,999 miles
   0.60	40,000-59,999 miles
   0.40	60,000-79,999 miles
   0.20	80,000-99,999 miles
   0.00	100,000+ miles

For instance, if your car’s market value is $15,000 with moderate damage and 20,000 miles, your calculation would result in a diminished value claim of $600.

Filing a Diminished Value Claim

Filing a diminished value claim can be intricate, as the burden of proof often lies with the claimant. Follow these steps:

1. Contact the at-fault driver’s insurance company.
2. Document your car’s pre-loss value using trusted sources.
3. Prove your car’s diminished value with photos, accident records, and possibly an appraisal.
4. Satisfy all insurer’s conditions for a diminished value claim.
5. Keep in mind that state regulations influence how these claims are handled.

Considerations and Timing

Whether to file a diminished value claim depends on your car’s age, mileage, fault in the accident, uninsured drivers, and state regulations. It is generally advisable to file a claim against the at-fault driver’s insurance as soon as possible.

Is Filing a Diminished Value Claim Worth It?

The worth of a diminished value claim varies based on circumstances. If you’re not at fault and your car’s value is relatively high, a claim might be beneficial. Consulting with professionals and understanding your state’s laws is crucial in making an informed decision.

FAQs

• Is diminished value negotiable?
  Yes, some negotiation is possible, often aided by an independent appraisal.
• How much does a car’s value drop after an accident?
  Resale value can drop by around $500 after an accident.
• Can I file a diminished value claim with my insurer?
  Usually, claims are filed against the at-fault driver’s insurer.
• How long does it take to settle a diminished value claim?
  The process varies based on factors like insurer policies, claim type, and state regulations.
• Is filing a claim worth it?
  It depends on the situation; consult experts, analyze state laws, and weigh your circumstances.

Conclusion

Filing a diminished value claim requires understanding the intricacies of the process. By following the steps outlined in this guide and considering your unique situation, you can navigate the process effectively and potentially recover the financial loss incurred due to diminished value after a car accident. Remember, being well-informed is the key to a successful claim.