Traditionally, insurance companies must cover all the repair expenses after an accident. However, your losses might go beyond scrapes and minor dents on your car's bodywork. An interested buyer might not be willing to pay the money he would pay for a similar fleet vehicle that hasn't been involved in an accident.
Your car has lost some value, which you need to be compensated for. If you follow the laid down procedure and file a diminished value claim, chances are you'll recoup the vehicle's depreciated value.
But What is a Diminished Value Claim?
Essentially, a diminished value claim helps fleet managers to get compensated for the loss of a car's value after an accident. So, if you're involved in an accident, and all the repair costs are covered by the other party (the driver who caused the accident), you can file for diminished value if you believe that your car's market value has depreciated.
The amount paid for diminished value helps cover the losses you're likely to experience after new buyer factors in depreciation after the accident and pays below the current market value. Auto insurance companies use a custom diminished value claim calculator to determine the amount you'll get.
What are the 3 Types of Diminished Value Claims?
1. Inherent Diminished Value
Inherent diminished value refers to the vehicle's worth after accident repairs. Inherent value claims will always be present even if the car looks "as good as new." There's always an expectation that the vehicle will lose value after an accident, and all potential buyers will lower the car's value due to its history.
2. Repair-Related Diminished Value
Repair-related diminished value occurs when your mechanic uses substandard auto parts on your car. In this case, the reduced value concept assumes that vehicles cannot be restored to their original status after accidents. Therefore, paying attention to the auto parts used during repairs is essential.
3. Immediate Diminished Value
Immediate diminished value focuses on the value of the car after an accident. In this case, the car's resale value is calculated before being repaired. There's always an assumption that you'll get your vehicle repaired. Therefore, this type of claim is not commonly used.
How Do You File a Diminished Value Claim?
It's essential to file for a diminished value claim immediately after the accident. Here are the steps to follow:
Determine the Fault Party
Police reports provide reliable information on who was at fault. You can go further and take accident photos while at the same time writing witness testimonies to prove your arguments.
Research State Laws
It's advisable to analyze state laws to understand your rights regarding diminished value claims. Then, your state laws will guide you on how to go about the process and how you can get compensated for the lost value.
Check Your Insurer's Rules
You'll file the claim with the at-fault party's insurance organization. Therefore, you need to call them immediately and understand how a diminished value claim works in their company.
Gather all the Documents
The success of your claim solely depends on the documents provided. Therefore, you need to gather all the supporting documents to support your claim. Some of the official documents you need include; a bill from the auto repair shop, a copy of the police report, and even photos from the accident scene.
Calculate Your Car's Diminished Value
Work with professionals to determine the diminished value of your car. Make sure you have a signed report to support your claims. Unverified reports might not be sufficient enough to support your claim.
File the Claim
With all supporting documents available, you can now file the claim. Ensure you're following the insurance company's regulations for filing the claim. Answer all questions from the insurance companies to get the process going as quickly as possible.
Filing for a diminished value claim might not always be easy. Insurance companies will always find ways to dispute your claims, while others may offer a small token based on their calculations. Avoid such challenges by working with professionals such as Wilmar, who will help manage your fleet and also deal with legal matters such as diminished value claims.