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Diminished Value and What It Means To You
When your vehicle has been damaged in an accident there are factors that
will determine the “DIMINISHED VALUE” to your vehicle.
These Factors are:
1. The Type of Damages
Cosmetic Damages - When there is only cosmetic damages, such as repairing a fender… bumper cover… or replacing a bolt-on part, there is little or no “DIMINISHED VALUE“. Can You determine if there is any “DIMINISHED VALUE“? (WE CAN)
Structural Damages - Structural damages to a full frame or uni-body vehicle will diminish the value of a vehicle. In repairing a vehicle with any structural damage, it is very important that it is repaired correctly. Some insurance companies and repair shops may repair the damaged structural part when replacement of that part would be called for by the manufacturer of that vehicle. Can you determine whether the structural damage to your vehicle needs repairing or replacing? (WE CAN)
2. The Quality of Repairs
The overall quality of repairs is also a factor
in determining the amount of “DIMINISHED VALUE“. We have inspected vehicles that were poorly repaired where our involvement resulted in … The repair shop having to re-repair the vehicle at their own expense… [OR] The repair shop having to actually buy the repaired vehicle back from the owner at its pre-damaged value. Can you really tell
whether your vehicle was repaired correctly? (WE CAN)
3. Percentage of Damages and Disclosure - In The State of North Carolina, if
your vehicle sustains 25% or more in damages, relative to it’s “ACV” (Actual Cash
Value), then you are bound by the North Carolina Disclosure Law to… inform the potential buyer of your vehicle's damage history. Now supposedly, if your vehicle is five(5) years old or older, then the State of North Carolina states that disclosure is not required. BUT, if you look on the backside of you North Carolina Certificate of Title,
there is (in fact) an area for you to indicate whether or not it has in fact sustained 25% or more in damages. A Touchy Situation. Do you know how to determine the actual percentage of damages? (WE CAN)
4. Make | Model | Miles | Year | Condition - All these elements factor into
determining the “DIMINISHED VALUE“. EXAMPLE: A 2001 Lexus GS, in very good
condition can be worth more than the same 2003 Lexus GS model, that is not
in as good condition and has more miles on it.
Can you make appropriate determinations? (WE CAN)
Excuses Why The Insurance Company Won’t Pay . . .
When you file a “DIMINISHED VALUE” claim to the at fault insurance company be prepared. You may encounter excuses for not paying such as….
1. Your Vehicle Is Too Old - [Factor # 4] - It depends on Make | Model | Year | Miles | Condition. The insurance adjuster your dealing with is most likely not even in this state. So how can they say that your vehicle is too old?
2. Your Vehicle Did Not Receive Enough Damage - Damage history is damage history. It depends on the amount of damages and type of damages to your vehicle for the amount of “INHERENT DIMINISHED VALUE“. INHERENT DIMINISHED VALUE is the Automatic Loss of Value because of the accident [Factors # 1 & # 2].
3. We Paid For All New Parts and Proper Repairs- That does not matter, again you still have “INHERENT DIMINISHED VALUE”. Besides, there are so very few insurance companies that ever pay for all new OEM parts (Original Equipment Manufacturer) unless the vehicle is a new model year, and with generally with less than 15,000 miles.
The insurance company will want to repair your vehicle with “AFTER-MARKET PARTS” (these are parts made by another manufacture), and not with OEM parts. And if you give them the chance and you’ll get “SALVAGE YARD” parts (part’s from a total loss vehicle) put on your vehicle. Also, they rarely pay for proper repairs needed to restore your vehicle back to it‘s “PRE-ACCDENT FUNCTION AND APPEARANCE”. NOTE: “PRE-ACCIDENT FUNCTION AND APPEARANCE” is restoring your vehicle to what it was before the accident occurred.
4. There Is No Formula And We Are Not Paying - There is not a concrete formula in determining “DIMINISHED VALUE” today, except what your vehicle was valued at before the accident and what the value is after the accident.
A SHORT REFERENCE FROM THE
NORTH CAROLINA JUDICIAL JURY INSTRUCTIONS
N.C.P.I.-Civil 106.62 Property Damage - Diminution in Market Value.
Replacement May 2000
The plaintiff’s actual property damages are equal to the difference between the fair market value of the property immediately before it was damaged and its fair market value immediately after it was damaged. The fair market value of any property is the amount which would be agreed upon as a fair price by the owner who wishes to sell, but is not compelled to do so, and a buyer who wishes to buy, but is not compelled to do so.
AGAIN, THIS IS FOR REFERENCE ONLY AND SHOULD NOT BE CONSTRUED AS LEGAL
ADVICE.
IF THE INSURANCE COMPANY DOES PAY . . .
If the insurance company tells you they’ll pay “DIMINISHED VALUE” to your
vehicle, be ready for…
1. We’ll Send Our Own Diminished Value Appraiser Out - Look out! Don’t think for a moment that the appraiser hired by the insurance company is going to give your vehicle a fair and un-basis “DIMINISHED VALUE” appraisal assessment?
2. The 17c Formula - The 17c Formula originated from a class action lawsuit in The State of Georgia [Mabry v State Farm Insurance Company]. This was action taken by State Farm Insurer’s for “DIMINISHED VALUE” on first party claims. It is to used as an alternate (fall back) method of determining “DIMINISHED VALUE” in the absence of any other documented measurement of “DIMINISHED VALUE“.
This method clearly favors the insurance company and not the vehicle owner. The
17c Formula is not recognized by The Department of Insurance of North Carolina, nor our North Carolina Judicial System.
3. Percentage of Damages - A lot of insurance companies will try to convince you that the “DIMINISHED VALUE” is from the percentage of the repair cost. EXAMPLE: The damages to your vehicle amount to $ 6,500.00. The offer of “DIMINISHED VALUE” payment to you will be around 5% or $ 325.00. They may even feel generous at 10% or $ 650.00. This is not correct.
Again, note the above short reference of the JUDICIAL JURY INSTRUCTIONS.
This is what you should be expecting if you rely on letting the insurance
company set the amount of DIMINISHED VALUE. |
