Driving a vehicle on a daily basis is a responsibility for many people. When you drive a car, it is important that you have it properly protected by insurance. if you have insurance on your vehicle and you are involved in an accident, your insurance coverage should be able to provide you with financial protection that would reimburse you for your expenses related to the repair. One additional expense that you could incur if your vehicle is damaged is diminished value, which you also will need to recover from your insurance company. There are six key concepts to understand when it comes to diminished value recovery.
1- What is Diminished Value?
If you get into a car accident, the insurance company will naturally provide you with reimbursement for any costs related to the damage. However, after an accident, your vehicle could be worth less simply because it has been in a car accident. The financial variance between the market value and the market value after the accident in all repairs are made is diminished value. In some situations, this could be a significant amount of money.
2- How an Accident Affects Value
After an accident is over, you will likely be able to have your vehicle repaired to the point where it is in good condition again. However, the second a car is involved in an accident and the crash becomes part of a vehicle history report, the value of the car is diminished. Also, when you are in a car accident, some of the repairs may not be able to return the car to the same value as it was before. This can include not getting good replacement parts of having a paint job that is not a perfect match.
3- Types of Diminished Value
When it comes to the insurance definition of diminished value, there are a variety of options to consider. One of the main forms of diminished value is immediate diminished value. With immediate diminished value, it is how much auto value and equity that you immediately lost because of the accident.
Inherent diminished value is similar to immediate diminished value, but it also assumes that there will be an inherent belief that any car involved in an accident is worth less. The third form of this, diminished value related to a repair, occurs if the repairs are made but the result is not of the same quality as the original condition of the vehicle.
4- How to Recover?
Depending on where you live and the type of auto insurance that you have, you could receive diminished value recovery from your insurance company. If this is the case, you will need it to make a claim that will request reimbursement for this amount. To do this, you will likely need to work with the insurance company to come up with an appropriate amount. This process can be complicated since you will need to figure out the market value with and without an accident on the record.
5- Timing of Reimbursement
In many situations, a diminished value claim can take longer to receive payment for. Since there is a lot of complexity that comes with determining diminished value, an insurance company may need to take additional time to come up with a fair value. This often takes longer than the actual repair expenses paid out. However, you need to continue to follow up with the insurance company during this time while you wait.
6- Hire Legal Representation
If you are not able to come up with a fair diminished value determination with your insurance company, hiring an attorney could be your best option. There are plenty of insurance companies that specialize in working with insurance companies to receive fair reimbursement. These lawyers are very aware of the complexities that come with diminished value determination and can help you to ensure that you get the best value possible.