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Can You Sue Your Insurance Company for Diminished Value After a Car Accident?

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Can You Sue Your Insurance Company for Diminished Value After a Car Accident?

If you suffered injuries from a car accident that was not your fault, you are probably wondering how you should move forward. Your vehicle has been damaged because of another driver’s negligence, and you have sustained painful injuries. You are facing financial loss and a significant amount of inconvenience. After you have been in a car accident, it is the insurance company’s job to ensure that you are “made whole” after the fact. Typically, the insurance company will be responsible for repairing your damaged car. 

However, if another driver is at fault, you may be entitled to have your car repaired and receive compensation for your car’s “diminished value.” In many cases, the at-fault party’s insurance company will not tell you about your right to compensation for the “diminished value” of your car. Your own insurance company typically will not assist you in pursuing this claim.

What is the “Diminished Value” of a Damaged Vehicle?

Diminished value refers to the lower value of a car after it has been in an accident. In most cases, even if the insurance company repairs the vehicle, the accident will reduce the car’s value when the owner sells the vehicle. Suppose you own a vehicle that you could sell for $15,000 on the market. A car accident occurs that is not your fault. The insurance company repairs the vehicle, and it is in good working order, but now the car may only be worth $10,000 on the market. 

Many used car marketplaces will look up the vehicle’s history. If it has been in an accident, the vehicle will not be worth as much as a vehicle that has not been in an accident. If your vehicle has a diminished value because of an accident that was caused by someone else, that person may be financially responsible for covering the loss. Most insurance companies avoid processing these types of claims, and working with an attorney can significantly help your claim. There are three specific types of diminished value:

  • Inherent diminished value: the damaged car was repaired but is not worth less due to the accident reported on the title
  • Immediate diminished value: the vehicle is worth less because it has been in an accident before repairs have been made. Typically, insurance companies repair vehicles, so this type of claim is more unusual
  • Repair-related diminished value: the vehicle is valued less because the repairs made after the accident are poor. For example, old parts were used, the wrong color of paint was applied, or the repairs did not work to put the vehicle in good working order.

Most cases involve claims of inherent diminished value. The at-fault party’s insurance company is responsible for paying out this money, but they almost never do so automatically. You will need to begin the process yourself by filing a claim for diminished value with the at-fault driver’s insurance company. 

How to File a Claim for Diminished Value

You can only pursue a claim for diminished value if the damage to your vehicle was not your fault. If your own mistake or negligence caused the car accident that resulted in your damaged property, your insurance company will not cover the cost of your own mistake. However, once someone else causes damage to your vehicle, you do have a right to file a diminished value insurance claim with the at-fault driver’s insurance policy. 

The first thing you will need to do is learn what the loss in value is for your vehicle. Then you will need to present this information to the at-fault insurance company and file a claim. Before they will provide you with compensation, you will need to prove that a diminished value has occurred.

Proving the Diminished Value of Your Vehicle 

When you file a diminished value claim letter, you will need to show that your vehicle has been appraised by a third-party organization. Even if you do not plan to sell your vehicle right away, you will still need to get it appraised so you can determine how much less your vehicle’s worth now compared to you before the accident. Working with an attorney can help you through this process. You’ll need to determine the value of your car pre-accident, which requires researching your car’s vehicle online and through other sources. Allowing an attorney to manage this process can help you while you focus on your recovery.

Submitting a Diminished Value Claim Letter

A diminished value claim letter is a document from a third-party appraiser that shows your vehicle’s current value after the accident. The letter is intended to explain to the at-fault ensure what happened and to State the value of the loss. The letter will need to explain the pre-loss value of your vehicle and the after-accident vehicle from the current appraisal. After you written the letter, you can submit the claim to the at-fault driver’s insurer. The process can become complex from this point onward. the insurance company may try to claim that they don’t owe you the funds or that the appraisal is inaccurate. 

If this is part of a more significant claim against the company for all of the damages you have suffered, the process can take some time. As a result, it may become necessary to take your claim for diminished value to the court. The insurance company may fight hard to show that your vehicle has not suffered a loss in value, especially if you are not selling it shortly.

About Harrison Law Group, P.C.

The Harrison Law Group, P.C. is a well-known, and respected personal injury law firm who is exclusively dedicated to handing a wide range of personal injury cases which include but are not limited to motor vehicle accidents, slip and fall accidents, dog bites, traumatic brain injuries, serious and catastrophic injuries, soft tissue injuries, construction accidents, and many other injury cases.

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