Car diminished value describes the perceived loss in value of a car after following an accident. What this simply means is that no matter how stunning the repair job is, so long as your car is damaged in a car accident, the fact remains that it has a damage history already. Due to this, the value of the car reduces.
Reason for the Perceived Loss in Car Value Following an Accident
The reason for a car’s diminished value is because it has been involved in an accident. Once you put up your car for sale after an accident, then you are dealing with a diminished value. Fixing and pimping the car to give it a luxury look will do little in recovering the lost value. For the fact that the car has been involved in an accident, the market value of the car will not be at the same par with those vehicles of the same model that are accident free.
Here is a fine example of a diminished car value. Your brand new car gets involved in an accident. Your insurance company helps restore the car to its original look. You list the car on the market and since the new buyer checks the history report of the car, he discovers that the car has been damaged in an accident. For this reason, they lower their initial price offering. They no longer feel comfortable paying the same amount a non-accidental car is worth. In rare cases, some buyers will look elsewhere since they are not interested in buying an accidental car. Since the repair job has fixed the physical damage, you are now facing a loss of value.
Diminished Value Insurance Claim
Once you know that your vehicle loses value regardless of the amount of repair job done, then you might want to consider filing for a car diminished value insurance claim. A diminished value insurance claim is when you file for compensation with your insurance company for the difference between your car’s value before the accident and repair job and its current market value after completing the repair job. This claim can amount to several thousands of dollars for the latest vehicle models.
Depending on your state and circumstances surrounding the situation, you may get full compensation following a claim. Remember every insurance company has its own unique policy when it comes to diminished value. Fortunately, some states might influence these policies. In some states, your insurer will first determine the at-fault party before compensation. In other states, you may not get paid at all.
While some other policies state that an at-fault party cannot file a diminished value claim.
In the event that the accidental damage to your car is a result of a third-party negligent act, then you have the chance to legally pursue the party responsible for the damage. However, your insurance company can always compensate you for your loss.