A Diminished Value Claim is a type of auto insurance claim where a policyholder seeks compensation for a decrease in the vehicle’s value after an accident. This is especially relevant when a vehicle has been in an accident, repaired and is now worth less than it was prior to the accident.
Diminished value is the market value loss that occurs when a vehicle has undergone repairs. It is the difference between the pre-accident value and the post-repair value. The price for a repaired car may be significantly lower than the pre-accident value.
There are three types of diminished value claims. They are the following:
It makes up most of the Florida diminished value claims and is one of the common types in auto accident diminished value. Inherent diminished value occurs when a vehicle incurs physical damage, resulting in a decrease in its market value.
It represents the difference between the vehicle’s resale value immediately after a crash and its value after it gets repaired. Any damage to a vehicle can decrease its value. If the vehicle owner decides not to repair it, the value of the vehicle will diminish.
This type of diminished value means that the vehicle’s value has decreased due to improper repairs, such as using low-quality parts. For example, the paint on the car may differ from its original color.
The diminished value is the difference between the market value of your car before the accident, undamaged, and its worth after repairs.
Carfax reports and other vehicle history records show the history of any accident and any damage to a vehicle. They will list the amount of money spent on repairs, which will determine if there is any diminished value.
It is critical to recognize that a diminished value claim only applies when a car has sustained damage.
If you have grounds for a diminished value claim after vehicle damage in a car accident, you can follow these steps. It will help you move through a diminished value claim and pursue compensation for your damages.
Consult with the at-fault driver’s insurance company to ask about their diminished value coverage. If you are liable, the insurance company will not pay for the diminished car value. Even with comprehensive or collision coverage, if you are at-fault, your insurance company will not reimburse you. Therefore, it is vital to check your auto insurance coverage to know if you are entitled to any diminished value after a car accident.
If you want to get compensated for decreased value, you need to research and understand the laws of your state as well as the policies of insurance providers. Fortunately, a car accident lawyer can help victims receive compensation from the liable party’s insurance policy.
The grounds for a Florida diminished value claim will depend upon several factors, such as the following:
The victim could pursue a diminished-value claim if the victim met the conditions mentioned above.
Calculating the decrease in value of a car after an accident is straightforward. The insurers will use a formula known as 17c. The formula works by taking 10% of the car’s book value and applying a modifier on the amount of damage and the mileage at the time of the accident.
For example, if a car’s book value is $30,000, the formula 17c will begin at $3,000, which is 10% of the value. If we apply a 50% mileage modifier, the value lowers to $1,500. And when we add the 50% modifier, the diminished value claim is reduced to $750.
In short, the lower the mileage of the car and the more valuable it is, the higher the compensation you can receive. However, pursuing compensation may be challenging as insurance companies may put every effort into devaluing the car.
Expert auto appraisers, equipped with specialized knowledge in diminished value appraisals, conduct these assessments. These experts can provide an accurate estimate of the amount of diminished value that a car has experienced, as well as other important information. This can be invaluable for cases that may go to arbitration, mediation, or litigation.
Utilizing appraisals can be an effective way to determine the reasonable value of a car that has been through an accident. These appraisals consider factors such as market conditions, vehicle make, model, age, mileage, and overall condition in order to come up with a determination.
They are important because they provide proof of the diminished value so that victims can get appropriate compensation for their losses.
If you have been in an accident involving a vehicle, remember that the statute of limitations is 4 years. This means that you only have four years from the date of the incident to file your claim.
Connecting with a car accident attorney is paramount if you’ve suffered a car collision. An attorney can determine whether you are eligible for filing a diminished value claim. Moreover, they can inform you of your rights and explain the process of obtaining compensation for your damages.
Schedule a free case evaluation with a qualified car accident lawyer to learn more about the diminished value claim process in Florida.
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