What Is Diminished Value?

When filing a claim after a severe car accident, your primary concerns likely include recovering compensation for your medical bills and property damage. However, with time, you may wonder about other damages you suffered due to the other driver’s negligence.

One category of damages that accident victims may not be aware of is “diminished value.” Suppose your vehicle was damaged in a car accident and repaired. In that case, its fair market value is likely less than it was before the collision. You can seek compensation for this reduction of your repaired vehicle’s resale value.

If you were injured in a New Jersey car accident, schedule a free consultation today with a member of our legal team. Our personal injury lawyers can help you pursue compensation for your medical bills and the diminished value of your vehicle. To get started, call Judd Shaw Injury Law 24/7 at 1-866-909-6894.

Understanding Diminished Value

It is normal for factors such as wear and tear, age, and mileage to cause the value of a car to depreciate over time. In contrast, a car accident can result in the value of your vehicle dropping, especially if it sustained major damage.

Diminished value is the difference between your vehicle’s pre-accident worth and its market value post-accident.

A car diminishes in value even if the quality of the vehicle repairs meets the highest quality standards. With Carfax reports being readily available, it is easy for potential buyers to obtain your vehicle’s accident history. The reality is that potential buyers may be unwilling to pay as much for a vehicle that was in an accident.

The Three Types of Diminished Value Claims

Car accidents commonly result in damage to vehicles. According to the National Safety Council (NSC), over 4.3 million police-reported crashes involving property damage occurred in one year.

There are three types of diminished value claims: immediate, inherent, and repair-related.

Immediate diminished value

This type of claim refers to the value of your vehicle immediately after an accident before repairs have been made. The immediate diminished value of a car is the difference between what a vehicle was worth before the accident and what it may be worth after it is damaged without repairs.

Since getting your vehicle repaired remedies this issue, most drivers will not ever file an immediate diminished value claim.

Inherent diminished value claim

This is the most common type of diminished value claim. A vehicle will lose value after an accident, even if it is completely repaired.

When you file an inherent diminished value claim, you are requesting the insurance company to pay you the difference between your vehicle’s resale value before the accident and the current resale value after it has been damaged and repaired.

Repair-related diminished value claim

You may file a repair-related diminished value claim if the repairs done to your vehicle after an accident are not done properly, faulty parts were used, or the quality of the work was poor.

For example, the repair shop uses low-quality auto parts instead of original equipment manufacturer (OEM) parts to make repairs, or the type of paint the body shop used does not truly match the original color. Such repair issues can cause your vehicle to drop in value and be grounds for a diminished value claim.

Who Can File a Diminished Value Car Accident Claim?

In most states, car accident victims can recover compensation for the diminished value of their vehicles. This is because the at-fault driver and the insurer have a legal obligation to make the accident victim “whole” again. This would include restoring the victim’s vehicle to the pre-accident fair market value.

You will need to meet the following requirements to qualify to recover money for a diminished value claim:

• You were not at fault: If another driver’s negligence caused your accident, you can typically file a diminished value claim with his or her insurance company. However, if you were at fault for the car accident, you usually cannot file a diminished value claim with your insurer.

• Your car has a clean title: If your car was in a prior accident and the damage was minor, you may be able to file a diminished accident claim. However, if your vehicle was in a major accident and has a rebuilt or salvage title, you likely won’t qualify for a diminished value claim.

• You own the vehicle: Generally, you cannot recover diminished value on a leased vehicle. However, if you own the vehicle but are still making financing payments, you will likely still qualify.

• You have a newer vehicle: Typically, your car must be less than 10 years old and have under 100,000 miles. You may not qualify for diminished value compensation if you have an older or high-mileage vehicle.

• Your state’s laws: Most states, like New Jersey, allow accident victims to file a diminished value claim with the at-fault driver’s insurance company. However, the specific rules for filing a claim vary from state to state. A diminished value lawyer can tell you the laws specific to your area.

Contact a Car Accident Lawyer Today to Get Help Filing a Diminished Value Claim

The diminished value of your vehicle after a major accident could be substantial. So it is important to act quickly to recover your car’s lost value. Your best course of action is to hire a car accident attorney who can help you file a diminished value claim.

The car accident lawyers at Judd Shaw Injury Law have many years of experience in handling all types of car accident claims. Our compassionate attorneys understand how vital it is for you to receive fair compensation after an auto accident.

We have helped clients recover millions of dollars in damages, and we want to do the same for you. With our No Fee Guarantee®, you will not pay us anything unless we recover money for your claim.

We work for you – not the insurance company. Contact us 24/7 at 1-866-909-6894 or complete our online form to schedule a free consultation.