What is a diminished value claim? How can I claim it? It's a little-known insurance payout. It amounts to compensation for the loss of your car's resale value after
someone else hits it. Most car owners and even some of the most seasoned insurance brokers have little or no idea what it is or how to file. Let me dive in and explain.
Well first, let's examine what the point of car insurance is, it's contract between you and a company that you pay to make you whole again after a car accident, let it be from paying for the hospital, paying for your car to be fixed, down to being able to rent a car, their job is to indemnify your loss.
So if their job is to bring you back to where there is no loss, how is it possible if your car after an accident has a record of what damage has been done? No matter how expertly repaired, a car with an accident history will likely be worth less than one without, even if the car looks exactly as one without. Let's even ask yourself, if car A has no damage and was selling for 15,000 and car B had been fixed and is selling for 15,000, even though they are the exact same car, which car would you choose?
A car that has never been in a crash may be worth $15,000 at resale but thousands less if it has been in an accident and repaired. Now there is a way to make up the difference: a diminished value claim. Diminished value insurance claims allow car owners to recover the difference between a car's pre-accident value and its value after repairs. Most states are "pure comparative." In those states, if they also allow diminished value, you would be owed the percentage of your claim that you are not at fault for. So, if you are 50% at fault, you could collect 50% of your diminished value claim from the at-fault parties insurance. Some states have thresholds for fault. Some states don't. This is all extremely state specific.
You need to make the call to get a diminished value claim. The insurance companies won't freely tell you about it. Also, don't call the agent for the at-fault party. They don't deal with damages. If they give you information, it is likely to be incorrect. Call the Claims Adjuster. Also file your claim right away, as in when the repairs are happening with the car. Finally, the decision of your insurance company is not relevant here so don't worry about what they say.
Now let's break down where this actually is valid. 46 states have laws that address diminished value. The statute of limitations is all over the place, but in New York, you have three years. Also, most states require a carrier to pay an undisputed amount. So, if they offer you $1,000 but you want $3,000, they have to pay you the $1,000 because they have agreed that they owe you AT LEAST that amount. Most states do not interpret cashing a check as acceptance of an offer, but check to make sure before you take any amount of money from the insurance company.
Here's the process:
1) Give your side of the story to the other person's insurance company like normal. But make a note of the name/number of the agent you spoke to.
2) Wait until the insurance companies agree on who is at fault. That usually takes a couple of weeks and you can call your own insurance company for an update. They must conclude you were at most 50% fault or else you can stop right here.
3) Call up the agent for the other insurance company and tell him you are pursuing diminished value. Depending on the size of the office they'll either send you off to someone else, or they'll help you. It helps to have THEIR claim number as a reference.
4) Answer their questions. Sometimes they'll send an agent to inspect the car after it's been fixed. Sometimes they won't. But in 3-10 days they'll either provide you an offer or ask for more documentation for proof of the diminished value.
5) Accepting or declining the offer is up to you. But once you arrive at a figure that is amenable to both sides, you sign a document waiving your right to sue the insurance company for this collision. Once they have that, they mail you a check.
That's it. Four steps, and one phone call to start it. This is a very powerful tool for when your car is in an accident that your not in fault. If this seems a little overwhelming to you, you can always call up a law firm that specializes in Diminished claims lawsuits such as Coffey Trial Law. If you have any questions or concerns, reach out to me at (718) 551 - 7131.