Knowledge is Power!

Auto insurance companies dislike hearing the words Bad Faith, from their own insured and Diminished Value, from third-party claimants. What is Diminished Value, and how is it really determined? True Diminished Value n North Carolina is, "the fair market value of the vehicle immediately before the accident and immediately after the accident, then the repaired fair market value. Yet auto insurers want you to think Diminished Value is ONLY after the damaged vehicle has been repaired. (See Bad Faith in the DV First-Party? section).

The Proof is in LAW!

Diminished Value According to G.S. 20-279.21

(1) The claimant and the insurer fail to agree as to the difference in fair market value of the vehicle immediately before the accident and immediately after the accident; and...

(2) The difference in the claimant's and the insurer's estimate of the diminution in fair market value is greater than two thousand dollars ($2,000) or twenty-five percent (25%) of the fair market retail value of the vehicle prior to the accident as determined by the latest edition of the National Automobile Dealers Association Pricing Guide Book or other publications approved by the Commissioner of Insurance, whichever is less...

(3) Then on the written demand of either the claimant or the insurer, each shall select a competent and disinterested appraiser......

(2) continue...

For purposes of this section, "appraiser" and "umpire" shall mean a person who as a part of his or her regular employment is in the business of advising relative to the nature and amount of motor vehicle damage and the fair market value of damaged and undamaged motor vehicle.

There are auto insurers that follow G.S.20-279.21 as for hiring a competent and disinterested appraiser and other auto insurers hire so-called competent and disinterested appraisers. Yet, I have not met any appraiser who has been hired by  auto insurers that follow G.S.20-279.21 to the letter. They only state a repaired fair market value and NEVER mention the fair market value in the wrecked condition. On top of that, many of them DO NOT qualify as an appraiser under G.S.20-279.21 as being in the business of "advising relative to the nature and amount of motor vehicle damage and the fair market value of damaged and undamaged motor vehicle."

(1.) Do you qualify under G.S.20-279.21 definition as an appraiser who is in the business part time or full time in advising relative to the nature and amount of motor vehicle damage and the fair market value of damaged and undamaged motor vehicle?

If the answer is no, then the auto insurer's appraiser is not qualified. Now auto insurers will hire an independent appraisers that estimates damaged vehicles for for other auto insurers.  Therefore, you have to find out if the appraiser does so. This is because that the so-called disinterested appraiser will appraise the fair market value of the vehicle more than it really is making the Inherent Diminished Value much less than it really is.

(2.)  When following G.S.20-279.21, do you state in your report the fair market value of my vehicle and immediately after the accident and the repaired fair market value?

If the answer is no, then the auto insurer's disinterested appraiser

(3.)  Have you ever been in the business of buying and selling cars before?

If the answer is no, my opinion is the appraiser is still not qualified.

(4.)  Have you ever purchased damaged vehicles, repaired them yourself and then sold them?

If the answer is no, my opinion is the appraiser still is not qualified.

(5.)  When the auto insurer's disinterested appraiser inspects the repairs to your vehicle, ask the appraiser how many years have they inspected damaged repaired vehicles for Diminished Value and how many did the find un-safe to drive after the repairs.

If the so-called disinterested appraiser claims to have never found a repaired vehicle un-safe to drive, then that so-called disinterested appraiser in the pockets of the auto insurer. Since August of 2003, I have found over 1.5 million dollars of damaged repaired vehicles un-safe to drive after the auto-body shops repairs, with the majority of them being repaired at the auto insurer's recommended auto-body shop!

Auto Insurers and DV Formulas

There are some auto insurers that use a type Diminished Value formulating program (Excel type), when determining the Diminished Value of the vehicle. These Excel programs WILL NOT show the “fair market value of the vehicle in its damaged condition,” and they produce a ridiculously low amount of Diminished Value to a vehicle. SO when you are making a Diminished Value, ask the auto insurer how they determine Diminished Value and be prepared for a low offer by the auto insurer.