Filing a Diminished Value Claim After a Car Accident

If you are interested in filing a diminished value claim after a car accident, there are several key steps you need to follow and factors you must consider. It is best to complete this process with the assistance of an experienced Texas car accident lawyer to boost your chances of a successful outcome. Below is an overview of the overall process.

Types of Diminished Value After a Car Accident

It is important to know exactly which type of diminished value your car has experienced. In addition to assisting with the calculation of the diminished value, this will also provide a solid foundation on which to build your case. There are three different categories to consider.

Low-Quality Repair or Replacement

The quality of the post-accident repair work caused a sharp decline in the market value of the vehicle. For example, aftermarket parts may have been used to replace original equipment from the manufacturer.

Accident-Related Diminished Value

As soon as a vehicle is involved in an accident, its value declines. This is calculated even before the repair work is done. You likely would not use this category as the basis of your diminished value claim since the insurance company should have covered the cost of repairs after a covered accident.

Inherent Diminished Value

The mere fact that your vehicle now has a history of damage causes the value to drop – which is where the common claim of inherent diminishment comes into play. This category assumes that the repair work was stellar and that the accident history is the only factor that would cause the vehicle value to diminish.

Why You Should Contact Your Insurance Company

You may not be that familiar with “diminished value” as a concept, but your insurance company should know all about it. More importantly, they would be able to let you know if you already have some coverage to protect you against it in the event of an accident.

An experienced lawyer can also help you to examine the terms and conditions of your coverage. Doing so will make it clear if your claim should target your own insurance company or the carrier that insured the at-fault driver.

Get an Accurate Appraisal of Your Vehicle’s Value

It is imperative to get an accurate appraisal of your vehicle value. A simple estimate generated by a Google search does not always consider all the key factors necessary for an official appraisal – especially if a wide range is provided.

Focus on using such widely-recognized sources as Kelly Blue Book or NADA with the specific details of your vehicle’s current mileage and condition to get an accurate calculation.

Understanding the Math of Applicable Multipliers

There are caps and multipliers to consider when calculating the diminished value of your vehicle. The insurance company will consider this after you file the claim. Therefore, you need to conduct this research beforehand.

Base Loss Value

Most insurance carriers will apply a 10% base value loss once a vehicle has been damaged in an accident. This calculated amount is viewed as the maximum amount that they would pay for your claim. For example, a vehicle with an appraised value of $20,000 would result in a $2,000 value (10% x $20,000).

Damage Multiplier

The damage multiplier adjusts the 10% base value amount to consider the structural damage that your vehicle experienced. The multiplier ranges from 0.00 (no replaced panels or structural damage) to 1.00 (severe structural damage.) For instance, if the $2,000 base loss value was for a vehicle that sustained moderate damage (0.50), then applying the damage multiplier would add $1,000.

Mileage Multiplier

As is the case with any used car value calculation, the current mileage plays a key role in diminished value claims. The multiplier ranges from 1.00 (under 20,000 miles) to 0.00 (100,000 miles or more). Therefore, if the sample vehicle had 60,000 miles (0.40 multiplier) then you would apply that to the $1,000 for a total of $400.

Proving a Diminished Value Claim

In addition to an accurate calculation, you must also be able to prove the diminished value of your vehicle. Any records, photographs, or other documentation related to the accident and the resulting damage to your vehicle may suffice. You may even want to invest in an additional appraisal from a third-party vendor to complement the research that you did online through NADA and/or Kelly Blue Book.

The goal here is to be able to have as much evidence as possible in your favor when you and your lawyer negotiate with the insurance company. Make sure that you also do thorough research regarding the steps to take and deadlines to meet for filing your claim.

Talk to Our Texas Car Accident Lawyers

Dealing with everything involved in diminished value claims can quickly become overwhelming. Our car accident lawyers in Texas can help you seek compensation for all damages in your case. Contact Brent Coon and Associates today to schedule a free consultation.