When calculating the damages to your vehicle, after an accident, you must also consider the loss of value. One major element of the damage to your vehicle is your car value after a crash since it is reported to companies such as Carfax. This loss of value is called diminution. It can involve many thousands of dollars. Most people don’t know to ask their insurance companies to consider loss of value as part of the overall claim.
Diminution: The Hidden Aspect of Property Damage
After an accident, your car’s resale value can be less than a similar vehicle that has not been damaged at all. Therefore, the damage results in a decrease or “diminution” in the market value of the vehicle, even after repairs. The value of the car needs to be assessed before and after the accident. Your insurance claim for this difference can involve thousands of dollars. Second, the loss in value may be made against a third party that caused the damage to the your vehicle. Or it may come from a first-party claim against the physical damage coverage under the insured’s own automobile policy.
The Insurance Services Office (ISO) explains it this way: “A late-model car with a market value of $15,000 is involved in a collision and incurs substantial damage. Repairs cost $6,000, and the owner’s insurer pays the $6,000. Then, minus a deductible of $500. The owner decides shortly after making the repairs to sell the auto. Then, finds out that he or she will only be able to obtain a price of $12,500 for the car. Which is $2,500 less than he would have been able to receive had he sold the car the day before the accident. The difference is $2,500 in the market value of the auto. Because the collision is commonly referred to as diminution in value.”
The more expensive the car, such an exotic, the diminution in value can be significant!
At The Dawson Law Firm, we employ experts to help determine the loss of the value of your car as a consequence of the damages being inflicted in an automobile accident. This is part of the legal services we provide. In addition, we ensure that you recover the highest amount possible for your injuries. If you’ve been in a car accident, and have sustained injuries from that accident, call us. Let us explain further how we can help you.