When a car gets into an accident, diminished value is a term that comes up often. In most car accidents, it is common for the vehicle owners to seek damages in lieu of vehicle repairs. If you have suffered a crash, you can seek such damages from your own insurer. Alternatively, if the crash was caused by an at-fault driver, you are entitled to recover vehicle repair costs from the at-fault driver’s insurance company. An Orange County car accident attorney can help you with filing and submitting the claim.
However, many vehicle owners tend to overlook the fact that a crash may also result in reduced market value of a vehicle. This is true even when all the repairs have been performed and any parts that needed replacement have been replaced. The good news is that it is possible to recover damages that reflect this diminished value of the vehicle. A claim pertaining to this type of loss is known as a diminished value claim.
Diminished Value Claim
The basis of a diminished value claim is the difference between the market value of a vehicle before and after an accident. Suppose you were driving a sedan in Irvine, CA which had a market value of $45,000. Your sedan was hit by an at-fault driver resulting in significant damage. You used a vehicle damage claim to have your car repaired by the at-fault driver’s insurer. Even after the repairs, your vehicle is very likely to lose in terms of market value.
If the same sedan now fetches $40,000, this means that it has lost $5,000 in market value. A diminished value claim allows you to recoup this amount from the relevant insurance company.
Types of Diminished Value Claims
It is important to note that diminished value claims can be of different types. Here is a look at three key types of diminished value claim.
Immediate Diminished Value
This type of claim pertains to the decrease in the vehicle’s value after a crash and before being repaired. You may file this type of claim with an insurer if you don’t intend to seek damages for repairs. In such an event, you can recover a greater amount in lieu of the diminished value claim.
However, most vehicle owners will file a separate claim for repairs. As a result, filing an immediate claim doesn’t make much sense for most owners.
Inherent Diminished Value
An inherent diminished value claim pertains to the decrease in a vehicle’s market value even after quality repairs have been performed. Such a decrease in value is simply due to the reason that the vehicle now has an accident on its record. This may cause a prospective buyer to quote a lower price than the pre-crash value of the vehicle.
This type of claim is most common as it applies to nearly all car accidents. Any vehicle that has been through a crash is certain to lose market value. When this loss is insignificant, you may forego the hassle of filing the claim. However, loss in worth may go into thousands or tens of thousands of dollars, as in the case of more high-end vehicles and models. In these cases, filing an inherent claim may help you recoup these serious losses.
Repair-Related Diminished Value
In most vehicle damage claims, the insurer will recommend the mechanic for repairs. It is the responsibility of the insurer to recommend a quality mechanic, and the responsibility of the mechanic to ensure quality repairs. If the repairs are incomplete or substandard, this may cause your vehicle to lose value. When this happens, you can file a repair-related diminished value claim.
California Laws for Diminished Value Claims
California has a 3-year statute of limitations for diminished value claims. You can recover damages for these claims only when an at-fault party has caused the crash. However, it is possible to seek losses under your uninsured motorist coverage.
To file a claim, you need to submit a Diminished Value report, preferably prepared by a professional. This report will propose the actual loss in the car’s value which you can then demand against your claim.
Hiring a Reliable Orange County Car Accident Attorney
If you have been involved in an Orange County accident, we can help you. Our attorneys work with you to file for compensatory damages in lieu of personal injury, vehicle repairs, and diminished value. If you’re not sure whether your vehicle’s value has diminished due to the crash, we can also help you seek professional advice on the matter. Get in touch with us now to discuss your claim with our attorneys.