Q: What is diminished value?
A: Diminished value is the amount of a vehicle’s pre-loss value that was not regained after repairs were completed. The most widely accepted form of diminished value is Inherent Diminished Value. It is defined as the amount by which a vehicle’s resale value has been reduced simply due to the fact that the vehicle was involved in an accident, assuming quality repairs were made on the vehicle.
Q: How is Diminished Value calculated?
A: In 2001, there was a ruling in the state of Georgia (Mabry v State Farm) that tasked State Farm to produce a method in which diminished value could be calculated. They came up with a formula and produced a worksheet (Rule 17c Worksheet) that was approved by the court for that case. However, this formula has not been universally accepted. Typically, the insurance company will use NADA to determine a vehicle’s pre-accident value and compare it to the vehicle’s value once the repairs have been completed.
Q: Who will pay for the diminished value of my vehicle?
A: The defendant drivers auto policy is responsible for compensating for your vehicle’s loss of value. In the event that you are involved with an individual that doesn’t have auto insurance then the Uninsured Motorist coverage on your own auto policy will compensate you for your loss.
Q: Do I need an attorney to assist me with my diminished value claim?
A: Campbell & Associates can assist you with getting your vehicle appraised. There are reputable professionals that specialize in evaluating vehicles for diminished value claims. We will also negotiate the highest possible diminished value settlement on your behalf. Beware of dealing directly with the insurance company on a diminished value claim because, just like any other claim, they are trained to minimize the amount of money they pay out.
If you’ve been hurt in an accident and need assistance with your injury and getting your car fixed, call us today at 704-333-0885 for a free consultation. With convenient office locations in Charlotte, Gastonia, Hickory, Monroe and Rock Hill, SC we have experienced staff close to you!
Written by: Travis Blackwell, New Client Intake Department Head