Diminished Value: The Damage to Your Wallet May Be No Accident
One minute you’re on your way to work, or perhaps meeting your spouse and kids for a meal out, and the next minute, there’s crunching metal, breaking glass, and perhaps a serious injury to you, all because of the other driver’s fault.
One thing you know is that it will be costly. Even with insurance, there are bound to be medical costs. You’ll have to rent a car, and you may not be reimbursed for it. Deductibles come into play. And, if you miss work, you might be out some wages, too.
Once you are patched up, your next concern will be repairing your car. While your insurance company will cover the cost of repairs if your policy includes collision coverage, insurance often won’t pay you for the loss of value to your car. Your car loses value simply by having been in an accident, and this loss of value is called “diminished value.” It can be worth it to go after an insurance company in order to be compensated for the lost value.
What Kinds of Diminished Value Are There?
There are three kinds of diminished value:
- Immediate diminished value is the difference in a vehicle’s resale value before the accident and after the accident but before repairs are made.
- Inherent diminished value assumes the vehicle has been properly repaired. It is defined as the reduction in resale value simply because the vehicle has been in an accident.
- Repair-related diminished value includes additional amounts by which resale value is reduced because of insufficient or improper repairs.
Most legal cases involve inherent diminished value.
What Does the Law Say?
Theoretically, you are supposed to be compensated for diminished value. Maryland law says that you are entitled to either the cost of repairing the vehicle plus the loss of value due to the accident OR the fair market value of the vehicle if it is a total loss. In 1971, the Maryland Court of Special Appeals found that you can claim diminished value of your vehicle as long as the diminished value claim plus the cost of repairs does not exceed the vehicle’s value prior to the accident.
Insurance companies often ignore diminished value claims, because they know it will take going to court to force them to pay. Because of the various problems a person has to deal with after a serious accident, many people don’t want the hassle of filing a suit. But, if your car is relatively new or is an expensive make and model, the diminished value you are losing can amount to thousands of dollars. To get paid, you must take the insurance company to court, and you must do so in a timely fashion because of property damage statutes of limitation.
How Is Diminished Value Calculated?
Each insurance company has their own rules and formulas for calculating diminished value, with an adjuster carrying out the calculations. They take into account:
- The vehicle’s make, model, and year
- The value of the vehicle before the accident
- Mileage (low, average, or high)
- Any previous damage or accidents
- The amount and location of damage
- The repairs performed
- Whether the title is free from legal defects.
How Can I Get Compensated for Diminished Value?
In Maryland, you usually are compensated for diminished value losses only if:
- You were in an accident.
- You are the owner of the car.
- The other driver is the one at fault for the accident.
- You are making a claim against the other driver’s policy, which is known as a third-party claim.
You cannot put in a claim for diminished value in Maryland under your own collision policy, which would be a first-party claim.
How Do I Pursue My Diminished Value Claim?
The insurance company will generally come up with the most minimal figure possible, so it may become necessary to bring a case for the diminished value of your vehicle. Usually you will need an expert to assess the value of the vehicle both before and after the accident and to prepare a formal report, after considering the same factors that the insurance company’s adjuster used. Any information you have about your upkeep of the car (meaning regular maintenance), the condition it was in before the accident, and so forth can be useful to the expert.
The reason we have insurance is to make us whole again after we suffer an accident. You may need legal representation to find the best expert and to pursue your claim.
We’re listening. How can we help?
Car accidents cost you money, especially when it comes to your car’s loss of value simply because it has been in an accident, even if the repair job was excellent. If you believe you have a diminished value case and you would like legal assistance to recover what is rightfully yours, the Law Offices of Steven H. Heisler may be able to help. Steve has been practicing law in Maryland since 1988. In 1996, however, he decided to focus exclusively on personal injury law. Why? Steve has a heart for helping people. He determined that his education and experience could best be put to use advocating for the rights of folks who were harmed through the actions of others.
Keep in mind, however, that there may be a statute of limitations – or a time limit – for filing your claim, so you should not delay. Contact the Law Offices of Steven H. Heisler of Baltimore, Maryland, for a free initial consultation by calling (410) 625-4878 today, or use our online form.