DIMINISHED VALUE (WHAT INSURANCE COMPANIES DON’T WANT YOU TO KNOW)
If you have been in an accident that is NOT your fault, you may be entitled to compensation for the diminished value of your vehicle. What exactly is diminished value?
When your car is in an accident that is reported to the police and/or an insurance company, car buying tool companies such as CarFax and Autocheck will pick up on it. From that time forward your car will carry a negative accident history. Today’s car buyers are more savvy than ever (do you remember reviewing a CarFax report when you bought your last car?). With all of the available information, buyers tend to avoid cars with a negative accident history, even if the damage was not extensive and the car was fully and perfectly repaired. Used car dealers therefore offer significantly less for cars with a negative accident history because they have to discount these cars in order to sell them. Some used car dealers won’t even take cars with a negative accident history.
BOTTOM LINE, ONCE YOUR CAR HAS BEEN IN A REPORTED ACCIDENT, IT IS NOT WORTH AS MUCH EVEN AFTER IT IS COMPLETELY AND PERFECTLY REPAIRED AND RESTORED TO ITS PRIOR CONDITION.
The good news… Ohio is a Diminished Value state, meaning Ohio has recognized that, under certain circumstances, car owners can and should be compensated for the decrease in the value of their car resulting from an accident, not just the full cost of repair.
What Is An Example of A Valid Diminished Value Claim?
Suppose you are driving your two year old car that has never been in an accident and is worth $20,000. You are suddenly rear-ended at a traffic light, causing significant damage. You contact the other driver’s insurance company to make a claim. The company sends out an insurance adjuster who determines that the reasonable cost to repair the damage is $4,700, and you get an estimate from a body shop for that same amount. The insurance company is willing to send you a check for $4,700. However, once your car is completely and perfectly repaired, it now carries a negative accident report with CarFax, and is therefore only worth $16,000 since buyers do not want to pay as much for a car that has been damaged. Shouldn’t you be entitled to collect $8,700 instead of $4,700 in order to put you back in the same position you were in before the accident???
Am I entitled to Collect Diminished Value?
MAYBE: If you are NOT at fault and are dealing with another driver’s insurance company, you MAY be entitled to collect for the Diminished Value of your car. Usually, insurance companies are NOT inclined to approve Diminished Value claims, and you should be prepared for your claim to be rejected. At that point, you should consult an attorney knowledgeable about Diminished Value claims.
PROBABLY NOT: If you are at fault and are dealing with your own insurance company, your ability to collect for Diminished Value depends on what your written insurance policy says. Most policies do not provide coverage for Diminished Value, but offer Diminished Value coverage as an option for a higher premium.
What Should I Do If I Think I Might Have a Valid Claim for Diminished Value?
If you think you might have a valid claim for Diminished Value, DO NOT settle your claim with the insurance company until you contact an attorney experienced with Diminished Value claims.