Auto accidents can happen at any time to anybody and typically, damages are present. If you have an accident, there are many factors to consider. You obviously need to report the accident, document any/all damages, and obtain costs to repair/replace the damages to your car, but what about diminished value? The repair costs are the tangible amounts of the loss, but there are some losses that may be more challenging to evaluate, such as diminished value.
What is Diminished Value?
Imagine you are involved in an auto accident after a distracted driver hits you in the rear without ever applying his brakes. The cost to repair your car was significant, but after the repairs, you decide to trade in your car. This is where diminished value comes into play.
This type of inherent loss in value is the difference of the car value before the accident versus the value after the car repairs are complete. When you try to sell the car, your trade value will most likely be diminished since it has been wrecked, regardless of fault.
As a Car Owner, How Can You Establish Diminished Value?
Damages to your car can have a negative impact on the market value of your car, but what can you do if you are involved in an auto accident, and you are faced with this type of loss? This type of loss can be challenging to document, unlike the physical cost of repairs outlined in an estimate, but it can be done.
If you are in the market to sell/trade your car it is easier to tie down the diminished value. Simply calculate the difference in your trade value before the accident in comparison to the value after the accident. A car dealer may take hundreds or even thousands of dollars off your trade value based on a previous accident. The value of your car will be worth less than another like, kind, and quality that has not been involved in an accident.
However, if you are not planning to sell or trade, the amount in question can be disputable. A reduction in value takes into consideration the amount of damages along with the types of damages. A simple tap to your rear bumper is not the same as having actual structural damage involving the rear frame walls or body panels.
Filing a Diminished Value Claim
If you are involved in an accident that is not your fault, you should contact the at-fault party’s insurance company and present the claim for the loss of value to your car. Before you present your claim, it is recommended you get an appraisal from a reputable, expert dealer so that you can document the before and after appraisal difference. *Keep in mind that if your car has damages filed under comprehensive or collision coverage (first party claims), there is no coverage for loss in value.
If you have any questions concerning diminished value for your auto, please contact our offices at Burkett & Associates Insurance Agency at 256-704-7400. We are here for all your Alabama auto insurance needs.