Diminished value is simply depreciation in value of a car that has been damaged in an accident or any other way. No matter how excellently repaired, a vehicle with an accident history will most likely be worth little cash compared to the one without a damage history. The resale value will still be lower in the eyes of prospective buyers as long as it has been damaged. One may need to claim from insurance when an accident occurs.
All about diminished value
Even though some people may believe that diminished value comes from low-quality after market parts and inadequate restoration, such a thought might not be the only possibility. In fact, even cars repaired at a dealership with genuine original parts will still experience diminished value once completely repaired. The fact is, once your car is listed as having been involved in an accident, you will face diminished value.
Levels of diminished value
Instant or immediate diminished value
This diminished value is the difference in a vehicle’s resale value from before the accident to after the accident after all the repairs have been done.
Repair-related diminished value
This type of diminished value results specifically from the quality of repairs, for instance, if generic parts were used or the paint color is mismatched.
Inherent diminished value
This diminished value assumes that a car has been perfectly repaired after an accident to its original top condition, except that it is now considered as a car that has been involved in an accident.
How to get compensation for the diminished value
The only way to get compensation for your vehicle’s diminished value is by filing a diminished value insurance claim. Just to refresh your memory, this claim is when you for compensation from your car insurance firm.
If you are responsible for the accident, it might be difficult to collect anything from your insurance company. However, is someone else is to blame for the accident, your insurance company is more likely to approve your diminished value claim, even if the responsible party wasn’t insured.
How to determine your vehicle’s diminished value
Before making a diminished value claim, it is essential to figure out how much value your vehicle has lost as a result of the accident. You can either ask your dealership to give you an approximate market value of your car before and after the accident or get a qualified expert from a renown diminished value insurance firm.
Conclusion
To get paid for diminished value, you must first confirm with your insurance firm to see if they offer diminished value insurance. You can file a diminished value insurance claim on your own or hire a private legal firm to document the claim on your behalf. If the insurance company is reluctant to pay, you have the option of taking them to court.