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Most of us have been involved in an auto accident at some point. We have taken our vehicle to a body shop, gotten an estimate that was then sent to the insurance company, who then approves and pays for the vehicle to be repaired. Most people think that’s the only obligation the insurance company has. However, in certain states the insurance policy allows for payment of diminished value.

Diminished value is the difference between a vehicle’s market value prior to a collision and the value after. When you are involved in a collision and your vehicle is repaired, it may appear that the vehicle has been repaired to its pre-loss condition. While that may be true from a physical standpoint, the collision has likely severely affected the vehicle’s value. Unfortunately most policyholders don’t realize this until they attempt to trade-in or sell their vehicle and are offered sometimes thousands less than they anticipated due to the vehicle being involved in a prior collision.This is because when a collision is reported, it gets added to the vehicle history. Most buyers, either dealerships or private buyers, will obtain a vehicle history report that will show the vehicle has been damaged in a collision. Additionally, most of the time the dealership personnel is trained to spot and note prior repairs to a vehicle.

The most likely way to receive compensation for diminished value is if you were involved in a collision with a third party, it was the third party’s fault, and you have filed a claim with the third party’s insurance carrier. In most states, statutes have been passed that allow for the pursuing of diminished value in third party cases. Be aware that the third party’s insurance company will rarely mention diminished value until you do. Once you inform the insurance company that you will pursue diminished value, it will be up to you to prove the vehicle actually has diminished value. When it comes to first party claims, most states do not offer diminished value, but it won’t hurt to ask your insurance company if they do. A quick way is to first get a value for your vehicle. You can use websites like NADA or Kelley Blue Book to check the value of your vehicle undamaged. You can then take your repaired vehicle to a dealership and ask for a trade-in appraisal. They will do an inspection of the vehicle and give you a written offer. The written offer should show that the offer is less due to the vehicle being in a prior collision.

You can also get a professional appraisal and diminished value report from a qualified company. They will do all the above research and provide it to you along with a typed report to present to your insurance company. This could be your best option, as a qualified company should be experienced in dealing with insurance companies on such matters. It also takes a lot of the work and stress from you as insurance claims are very time consuming and diminished value claims are certainly no different.

Brown O’Haver has been hired by hundreds of attorneys and insureds and we have been very successful in helping them obtain diminished value payments from insurance companies. We recently had a client that contacted us about her vehicle that was damaged by a third party. The third party’s insurance company paid for the vehicle to be repaired. Once she contacted brown O’Haver, we prepared a diminished value report for her to submit to the insurance company and they paid her an extra $3000. This is just one example of the many insureds we’ve helped with diminished value over the years. Feel free to contact us if you have any questions regarding diminished value.