Has My Vehicle Suffered Diminished Value After My Crash?
David Muñoz | June 22, 2021 | Car Accidents
California is an at-fault state for motor vehicle accidents. When another driver causes a car accident, they are responsible for your economic and non-economic damages. Personal injury damages may include physical injuries, medical bills, lost wages, and pain and suffering.
However, you may also have a property damage claim if your vehicle sustained damage in the crash. In some cases, you may also have a diminished value claim.
What Are the Minimum Insurance Requirements in California?
California law requires that every driver have acceptable insurance in case of a car crash.
Acceptable forms of insurance include:
- A cash deposit with the DMV of $35,000
- A surety bond issued by a company licensed to issue surety bonds in California for $35,000
- A DMV-issued certificate of self-insurance
- A motor vehicle liability insurance policy
Most drivers choose the last option for their insurance. Car insurance liability policies must provide coverage for:
- $15,000 for death or injuries to one person
- $30,000 for death or injuries to more than one person per accident
- $5,000 for damage to property
Drivers may purchase higher limits of liability insurance, but many drivers choose the minimum coverage because it is less expensive.
How Does Liability Property Damage Insurance Work?
If another driver damages your vehicle in an accident, their insurance provider should pay to repair or replace your vehicle. However, if the driver has minimum insurance limits, the insurance company is only required to pay up to $5,000 for repairs or replacement.
Sadly, a minor fender bender can result in much more than $5,000 in repairs. Likewise, most vehicles on the road are worth more than $5,000. So, if your vehicle is totaled in the accident, you may not receive enough money to pay off the loan on your vehicle or replace it.
Some individuals purchase additional insurance coverage that pays off a loan or reimburses them for damages not covered by the other driver’s insurance policy.
Demanding Compensation for Diminished Value
Whether you are filing a first-party claim against your insurance coverage or a third-party claim against the other driver’s insurance, make sure to include an amount for diminished value. Diminished value represents your vehicle’s lost value because of the car crash.
There are three types of claims for diminished value:
- Immediate Diminished Value — This amount is equal to the difference between what you could have sold your car for before the accident and what you could receive for your vehicle in an “as is” condition without repairs.
- Inherent Diminished Value — This amount is the difference between the current value of your vehicle after repairs and the value of your vehicle had the accident never occurred.
- Repair-Related Diminished Value — In some cases, a vehicle will lose value because of shoddy repairs or repairs made with used car parts.
The insurance company may fight your diminished value claim. Still, it may be worth the time and effort to seek compensation for diminished value, especially if your vehicle is newer or sustained substantial damage.
Fighting the Insurance Company for Full Payment of Your Claim
Most property damage claims are settled before personal injury claims. As a result, many drivers do not retain a personal injury attorney to handle the property damage claim.
If your vehicle is damaged, the insurance company should pay to repair the damages. If your vehicle is totaled, the insurance company should pay you an amount equal to the vehicle’s fair market value at the time of the car accident. The property damage battle is generally over the value of the vehicle, using used car parts to make repairs, or the diminished value claim.
If you want to seek compensation for diminished value, you need evidence. It is a good idea to get at least three estimates of diminished value from reputable sources. Reputable sources may include a car dealer that sells the make and model of your vehicle, an auto repair shop that specializes in repairing the make and model of your vehicle, or another repair shop or dealer with a good reputation. Having estimates for diminished value can help you recover money for your claim.
Factors that could affect the value of your claim include:
- The make, model, and year of your vehicle
- The mileage of the vehicle at the time of the accident
- Whether your vehicle has been in any previous accidents
- The value of the car had it not been damaged in an accident
- The current market demand for your vehicle
- The extent of the repairs made to the vehicle
- The condition of the vehicle before the car wreck
It is also a good idea to take pictures of the damage to the vehicle and have an itemized list of repairs, including notations that aftermarket parts were used to make the repairs.
Do I Need a Personal Injury Lawyer to File a Claim for Diminished Value?
No, you can file the claim and negotiate a settlement without a lawyer. In many cases, it would cost more to hire a car accident lawyer to handle the property damage claim than the value of the claim itself.
If the insurance company refuses to negotiate a fair settlement or compensate you for diminished value, you might want to explore filing a claim through the California small claims court. The small claims court provides information online about how to file a claim.