show. I appreciate you guys tuning in to listen
to me for a little while today. The topic this week is going to be diminished
value claims. I think this is an important topic at least
it seems to be important to most of our clients who are in car accidents.
So let us kind of start with what is a diminished
value claim? Essentially what it is when you have been
involved in a car accident that is not your fault and your vehicle even after it has been
fixed is no longer worth the same amount of money that it would be worth had you never
been involved in the car accident. That is what a diminished value claim is. You are essentially saying to the insurance
carrier for the at fault party that even though your vehicle has been fixed it is now worth
less money at some point in the future when you try to sell it, when you try to trade
it in to get another vehicle and you are telling them that you should be compensated for that
difference in value. Insurance companies for at fault drivers do
not like paying out diminished value claims, they just do not and so they are going to
fight you on it but it is of interest to most of our clients who are in car accidents.
So I thought I would take a little bit of
time today to talk about the claims, how they work, what the important aspects of a diminished
value claim is and kind of what you need to be aware of. First and foremost to have a diminished value
claim if you have been in a car accident first the car accident cannot be your fault. If the car accident is your fault yeah your
vehicle may be worth less than it may have been but no one else is responsible for that,
no one else's insurance company is responsible for that. So to have a diminished value claim you have
to be involved in a car accident that is caused by somebody else.
So you have to have an at fault party who
you are going to be making that claim against. You also need to have generally a newer vehicle. You know if you have a later model vehicle
for example it is now 2014 if you are driving a 2003 or a 2004 Honda Accord you are probably
not going to have much of a diminished value claim. I mean you could have one potentially but
it is not going to be big enough to quite honestly make it worth pursuit.
I mean generally you need a newer vehicle. So we are in 2014 so it would probably have
to be a 2014, 2013 or maybe a 2012 vehicle. It generally needs to be a more expensive
vehicle. Your vehicle brand new was a 10 thousand dollar
car you are still not going to have much of a diminished value claim.
If your vehicle brand new let us say in 2013
when you got it a year ago was a 55 thousand dollar Chevy Tahoe that is loaded then you
probably do have a diminished value claim. So that is sort of parameter number one you
need a newer model vehicle that is generally a more expensive vehicle. Again these are just parameters, nothing is
carved in stone but generally we like to see if we are going to pursue one of those claims
the claim value being 30 thousand dollars or more the vehicle only being two years old
typically at most. Because essentially what we are saying is
even after the at fault parties insurance company fixes my clients car, so it is now
driveable and it is now fine, it now works perfectly fine it is still not worth as much
as it would have been because it has been in the accident and we are looking for 6,
7, 8, 10 thousand dollars or more in diminished value quite honestly.
So step 1 is the accident has to be somebody
else's fault. Step 2 is your vehicle needs to be a newer
relatively more expensive vehicle. Step 3 is if you are going to make a diminished
value claim you generally need to have your own insurance company pay to fix your vehicle
instead of making that property damage claim through the at fault parties insurance company
and having them pay for it and here is why. Most drivers out there are not carrying a
lot of property damage or collision coverage as far as insurance companies go and so if
the driver that hit you only has 10 thousand dollars-worth of property damage coverage
to fix your vehicle and it is going to cost 9 thousand dollars to fix your vehicle.
We are not counting the diminished value claim
we are just talking about fixing your vehicle. When they pay that 9 thousand dollars to fix
that vehicle if you make the claim through the at fault drivers company and you then
go and make a diminished value claim there is only 1 thousand dollars left to compensate
you for that diminished value claim because he only had a 10 thousand dollar policy when
it came to his property damage coverage. So what you want to do is get your vehicle
fixed through your insurance company which relieves 10 thousand dollars still available
to compensate you for your diminished value claim through the at fault driver. Now you know sometimes that is difficult for
clients because if you get your vehicle fixed through your insurance company you also have
to pay your deductible and if you have a 500 dollar deductible, if you have 1000 dollar
deductible you have to be able to pay that deductible generally to get your car fixed
or get it back from the dealership.
So that is step number 3 quite honestly is
get your vehicle fixed through your own insurance company even though you have to pay your deductible. The next thing to watch out for or the next
thing that happens is after your insurance company pays to fix your car so they spend
the 9000 dollars under your policy to fix your vehicle your insurance company will then
want to go to the at fault drivers insurance company and say to them that they need to
reimburse your insurance company. So for example if your insurance company is
Progressive they pay to fix your vehicle, the at fault drivers insurance company is
Geico, Progressive your insurance company after they pay to fix your vehicle will then
go to Geico and say Geico you need to pay us back 9000 dollars that we spent to fix
our clients car because the accident was your drivers fault and they have every right to
do that, but what you have to do is stop them from doing that and you have every right to
stop them from doing that. The way you do it is you say to your insurance
company and it generally takes a lot of firmness and a lot of things in writing but you say
to your insurance company do not go and do that, I am not giving you permission to do
that and you need to understand if you, my insurance company goes and sucks up that money
from Geico so it is not available for me on my diminished value claim you have now put
yourself ahead of me which you do not get to do and so you have to stop them from subjugating
or what they pay to fix your vehicle.
So that is the next step and the final step
is that you go to Geico and say that my vehicle is worth less because it was damaged in this
accident and they are going to say no it is not and then that fight begins and the way
that you prove it is you have to go get an independent vehicle appraiser to look at your
vehicle and prepare a report that essentially explains how much less your vehicle is now
worth even though it has been fixed and why it is now worth less and send that off to
the at fault drivers insurance company in our example Geico. Now Geico may go and do the same thing but
generally at the beginning of a claim what they do is they just look at it and they address
it one way or another. Now they may address it by agreeing with you
and paying you the diminished value, they may look at your appraisal and try to split
the difference with you if your appraisal says that your vehicle the diminished value
is 8 thousand dollars they may be willing to pay you 4 to be done with it or they may
deny it altogether and say we disagree we do not think that your vehicle is worth less. I have seen insurance companies try to argue
that it is not worth less at this point because you have not tried to sell it, you have not
tried to trade it in but there is actually case law in Arizona that says that they cannot
do that.
That you did not have to have tried to sell
it or trade it in to have a diminished value claim. So that has sort of fallen by the wayside
over the last couple of years but I think it is still an argument that insurance companies
try to throw out there. From that perspective the diminished value
claim is like any other claim where you have to go an fight with an insurance company. Now can an attorney help you on a diminished
value claim? Sure, if attorneys are willing to take those
cases.
We have taken them in the past, resolved them
successfully. I can think of a handful of cases that we
currently have in litigation where we have sued the insurance company on a diminished
value claim to try to make them pay what we believe that they should pay but they are
not easy but they are valid claims and I know that those types of claims are of interest
to our clients because it is true. I mean your vehicle is generally worth less
if it has been in an accident and when that accident is not your fault shouldn't they
compensate you for that. Now keep in mind the reason why you need to
meet these parameters newer vehicle that had more value to begin with in order to have
a diminished value claim worth pursuing when I say that I say that from an attorney's perspective
because it takes just as much work to litigate a diminished value claim as it does any other
claim and if your diminished value is 1500 dollars total, 1500 dollars is a lot of money
but when we look at the time that goes into that claim on an hourly basis if we have to
litigate it is probably 10 thousand dollars-worth of time to make a one-third contingency fee
500 dollars so it just does not make sense for most attorneys to take those cases.
Generally when we take those cases to a large
degree it has more to do with handling as part of a personal injury case that we are
handling and we deal with them in that realm. But I hope this was helpful to anybody that
has been in a car accident and is wondering how diminished value claims work with their
vehicles and what to watch out for and if you want to pursue it those are the things
that you need to do and keep in mind because the very important piece up front is that
you get your vehicle fixed through your insurance company instead of the at fault drivers insurance
company and that you prevent your insurance company from trying to subjugate against the
at fault drivers insurance company for what they paid to fix your vehicle because you
need that money to still be available to you on your diminished value claim. So thank you for tuning in this week. If you have any questions or topics that you
would like me to address in the future you can e-mail me at dzanes@zaneslaw.Com and I
am happy to set up a future show that addresses whatever your questions are.
Have a great week..
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