Car accidents can be a stressful and confusing experience. Beyond dealing with potential injuries and vehicle repairs, you also face another financial challenge: the diminished value of your vehicle. Even after your car is fully repaired, its market value can decrease simply because it has been in an accident. You can potentially claim compensation for this loss in value through a diminished value claim. In this blog, we’ll explore what a diminished value claim is, how it works in Florida, the types of diminished value, and the steps to file such a claim.
What is a Diminished Value Claim?
Let’s consider your car was valued at $15,000 before a collision. Following the required repairs, it may appear as good as new, but its market value might drop to $12,000 because of its accident history. The $3,000 difference is the diminished value. A diminished value claim allows you to seek compensation for this loss from the at-fault party’s insurance company.
You might wonder why your vehicle isn’t worth as much after repairs. The main reason is that an accident history often makes a car less attractive to buyers. Even if it looks perfect, the underlying concerns about potential hidden damage, future reliability, and safety can deter buyers. Moreover, the vehicle might not last as long as it would have if it had never been in an accident, further impacting its resale value.
In Florida, the law supports your right to seek compensation for this loss. The statute of limitations for filing a diminished value claim is 4 years from the accident date. When an insurer chooses to repair a vehicle, Florida law mandates that the car be restored substantially to the same appearance, function, and value as before the accident. The Florida Department of Insurance’s bulletin 84-270 emphasizes this, stating that an owner is only properly indemnified if the vehicle is restored without any loss in value.
The Florida standard jury instructions for property damage also outline how to measure such damages:
- The difference in the vehicle’s value immediately before and after the incident.
- The reasonable cost of repair, considering any remaining difference in value post-repair.
- Additional losses include towing or storage charges and the loss of use during the repair period.
3 Types of Diminished Value
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Inherent Diminished Value
Inherent diminished value is the most prevalent type and refers to reducing a vehicle’s market value simply because it has a record of being in an accident. Even with perfect repairs, the fact that the car has an accident history can make it less appealing to potential buyers. Typically, buyers are hesitant to pay the same amount for a car involved in an accident as they would for one with a clean history.
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Immediate Diminished Value
This type of diminished value arises when a vehicle is not repaired promptly after an accident. The longer the vehicle remains damaged, the more its value declines. This claim usually falls under the at-fault party’s insurance coverage or your own insurance policy if it provides for such situations.
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Repair-Related Diminished Value
Repair-related diminished value occurs when the quality of repairs negatively impacts the vehicle’s market value. This can happen if low-quality parts are used or if the paint doesn’t match the original. Poor repair quality or noticeable differences between the vehicle’s condition before and after the repairs can make it less attractive to buyers.
More: Why Is My Car Accident Settlement Taking So Long? When You’re Hurt, It Helps to Know What to Expect
How to File This Claim
Contact the At-Fault Party’s Insurance Provider
Begin by reaching out to the insurance company of the driver at fault. They might have coverage for diminished value in their policy. It’s also wise to check with your insurance provider, although they may not cover diminished value if you were at fault. If the other driver is uninsured, your uninsured motorist coverage could cover the damages.
Determine Your Vehicle’s Original Value
Utilize resources such as Kelley Blue Book or other reputable sources to establish your vehicle’s original value. This valuation depends on various factors, including the car’s condition, mileage, and make/model. Document this value as you will need it for your claim.
Get a Professional Appraisal
Hire a professional appraiser to evaluate your vehicle’s value post-accident. The appraiser will determine the extent of the diminished value compared to the original value. This appraisal will serve as critical evidence for your claim.
Consult an Attorney
Navigating the claims process can be challenging, so consulting with an experienced attorney in Florida can be invaluable. For those in areas like Key Biscayne, Coconut Grove, Hialeah, South Miami, Pinecrest, Palmetto Bay, Kendall, Glenvar Heights, Westchester, West Miami, Brickell, Sweetwater, Doral, Miami Springs, and Miami Beach, RRBH Law is here for you. Contact RRBH Law at 305-800-4663 to schedule a consultation and ensure you get the compensation you deserve.
File Your Claim
Submit all the gathered documentation to the insurance company. This includes the original value documentation, the professional appraisal, and other supporting evidence such as repair receipts and accident reports. Be prepared for potential negotiations with the insurance company. An attorney can be advantageous during this phase to ensure you receive fair compensation.