Automobile accidents are stressful. Even if your car has been restored to perfect condition, its value may decrease due to injuries and vehicle damage. The diminished value of your vehicle is the difference between its market value before and after the accident. Car insurance companies may pay for the diminished value of a vehicle after a covered loss, depending on the circumstances of the accident.
Many drivers may not know that they can file a diminished value claim after an accident. Some do not even realize these types of claims are available. Our car accident lawyers have compiled a guide to educate you and your household members about diminished value claims and how you can use them to maximize your settlement.
Get in touch with a car accident lawyer at (561) 806-5229 today, so you don’t leave any money on the table. We will take care of all your legal needs and work hard to get the highest settlement for you. Aside from helping you recover physically, our team commits to helping you cope mentally with the impact of a car accident.
What does diminished value mean?
Even if you restore your car to its previous state after an accident, its market value will decrease. The diminished value of your vehicle is the difference between its pre-accident market value and its post-accident market value. It will show on Carfax and similar reports that your vehicle was involved in an accident, thus reducing its market value. If your vehicle’s value has been diminished, you can recover the cost of restoring it to its pre-accident value with a diminished value claim.
Receive compensation for your car’s lower value
When you buy your car, its value starts depreciating. There’s an old saying that their car’s value decreases as soon as they leave the dealership. Even though that’s not exactly true, depreciation begins as soon as the title and registration are in your name. New cars generally lose 15% to 20% of their value after one year.
It’s a little-known fact that getting into an accident accelerates a car’s depreciation. The value of the automobile may decline depending on the condition before the accident and the amount of damage incurred. A diminished value claim compensates you for the difference between the value of your car before and after the accident.
The different types of diminished value
After an accident, your vehicle may have a diminished value in several different ways. These are the three types:
- Repair-Related Diminished Value – A vehicle’s diminished value is reduced when it cannot be repaired perfectly. As a result, the car is now worth less after repairs than before the accident.
- Immediate Diminished Value – The immediate diminished value of a vehicle is the difference between its resale value before damage has occurred and its resale value after the damage has occurred before being repaired.
- Inherent Diminished Value – Inherent diminished value is the most widely recognized and accepted form of diminished value. It ensures the best possible quality of repair. An accident reduces the resale value of a repaired vehicle by an amount called inherent diminished value. Furthermore, it is the basis on which any supplementary form of diminished value is added.
Calculating a diminished value claim in Florida
It is relatively simple to calculate a diminished value claim. Insurers use a formula called 17c, which takes 10% of the book value of the car and applies a modifier based on the amount of damage and mileage at the time of the accident.
Let’s imagine that the book value of your car is $30,000. Formula 17c starts at $3,000, which is 10% of the value. A mileage modifier of 50% is then applied, lowering the number to $1,500. In addition, a 50% damage modifier is added, bringing the diminished value claim to $750. The more valuable your car is and the lower the mileage, the more you can expect to receive.
Diminished value claims in Florida are easy to calculate, as mentioned above. However, getting the correct amount of compensation can be challenging. Insurance companies will undervalue your car and apply higher modifiers to your claim to pay you as little as possible. You need an experienced car accident lawyer, such as the ones at Bodden and Bennett Law Group, if you want to ensure that you get the maximum amount for your car’s lower value.
Maximize your diminished value claim
In the event of a car accident, the personal injury attorneys at Bodden and Bennett can help you collect the money that you deserve. Medical expenses, ongoing treatment, lost wages, pain and suffering, diminished value of your car, and more are covered. You can expect the insurance company to delay paying you the money you are owed after a car accident. Our team of legal professionals can fight for you. Our clients love the high-quality results we get from fighting insurance companies.
Factors to consider when filing a diminished value claim
The filing of diminished value claims may not be the best option for everyone. A diminished value claim may or may not result in a payout. Some factors to keep in mind include:
A vehicle’s value before an accident: If your car has a lot of miles or structural damage, a diminished value payout may not be available.
You caused the accident: Your insurer most likely will not pay a diminished value claim if you caused the accident.
Accidents caused by an uninsured motorist: You should file a diminished value claim with your insurer if you have uninsured motorist coverage.
Car insurance companies usually deny a driver’s right to recover for their injuries or lowball the amount of equity that has been lost in a car accident. For more information regarding getting fair compensation for your injuries and damage to your vehicle after a collision, contact us online or call (561) 806-5229 today for a free case evaluation.
