Let’s say you’ve been in a car accident. The other driver was found to be at-fault. You have been through the whole claims process and the other insurance company has paid for the repairs to your vehicle. You think the whole incident is behind you, but sometime later you to go sell your car and realize that your vehicle history report has a big fat red flag on it: this car has been in an accident.
Now what? Read on to learn what this means and most of all, how to avoid negative consequences down the road after an accident.
What is a Diminished Value Claim?
Essentially, a diminished value claim states that because of the accident caused by someone else your vehicle is now not worth what it should be, even after the repairs have been made. This diminished value could be because of the vehicle history report or could be because of shoddy repair work (mismatched paint or lower-grade parts). Either way, you aren’t getting the value you should because of the accident.
When Should You File a Diminished Value Claim?
If you’ve been in an accident and another driver is at-fault, you should file a diminished value claim. To be clear, at this time you can only file a diminished value claim against the other driver’s insurance company. You can not file this type of claim against the company you use for insurance.
You should file your diminished value claim as soon as possible after the accident. Doing so just makes it easier for you. If you wait, you could lose access or forget valuable information that will help your claim.
Where Can I File a Diminished Value Claim?
Auto insurance is a state-regulated product, so each state has their own rules. There are about 15 states that allow these types of claims to be filed. To find out the specific rules in your own state, contact your state department of insurance.
What Else Should I Know About Diminished Value Claims?
The main thing to understand is that diminished value claims are not acceptable in every state, nor by every insurance company. You will have to be sure to do your homework first to make sure you can file such a claim.
Also, be prepared to do some work to prove that your vehicle has diminished value because of the accident. You’ll need to know the vehicle value before the accident and will likely need to get appraisals and inspections as part of the process.
Most insurance companies use something called the 17c formula to calculate diminished value. Familiarize yourself with how the formula works to decide whether or not it’s even worth it to file a diminished value claim. If you have an older car with a low value, it may be more hassle than it’s worth to file a diminished value claim.
And, if you’re not happy with your insurance company, it may be time to shop around for a better deal. InsuranceWins will set you up with auto insurance quotes from companies you know just for filling out our simple form. Answer a few questions and get started today!