Diminished Value Claims For Car Accidents

Diminished value claims for car accidents

Car accidents can cause serious injuries and severe property damage, leaving you with significant medical bills and robbing you of the use of your car. If someone else caused your accident, their insurance should pay the cost to repair your vehicle, but the cost of repairs may not be enough to make you whole. Even after your vehicle is fully repaired it may be worth less than before the accident. You may be able to recover this loss in value by filing a diminished value claim.

What Is Diminished Value?

There are three types of diminished value:

  1. The vehicle’s value after an accident but before repairs is the immediate diminished value.
  2. The value a vehicle loses because of its damage history is the inherent diminished value.
  3. A loss of value due to poor quality repairs is repair-related diminished value. 

Inherent diminished value is the most likely to be at stake in a diminished value claim.

Any time a car is in an accident, that information goes on the vehicle’s history report. Many buyers are hesitant to purchase a vehicle that was in a serious accident because they fear that the vehicle may not be as safe or reliable even after repairs. Additionally, some car dealerships will not take repaired vehicles as trade-ins or offer a lesser amount for them.

As a result, cars with accident histories may have lower resale or trade-in values than the same type of vehicle that was never wrecked. The difference in the market value of your car before it was in an accident and the market value after repairs due to an accident is the inherent diminished value.

When Can You Make a Diminished Value Claim in Manhattan?

Most insurance policies exclude coverage for diminished value as a first-party claim. As a result, if you are using your collision coverage to pay for accident damage, you probably can’t file a diminished value claim with your insurance company.

However, if someone else’s negligence caused damage to your vehicle, you may be able to file a third-party diminished value claim with the liable party’s insurance company. You have three years from the date of the accident to file your claim.

What Is the Diminished Value Law in Manhattan?

The state of New York does not have statutory or case law that specifically supports diminished value claims. However, New York courts do recognize the right of an injured party to seek compensation to put them in the same financial position they were in before someone else’s negligence caused damages. If you can convince the court or the insurance company that your vehicle is now worth less money because of an accident that someone else caused, you may be able to recover compensation through a diminished value claim.

How Do You File a Diminished Value Claim in Manhattan?

To receive compensation for diminished value, you must prove that another party’s negligence caused the damage to your vehicle and the damage resulted in diminished value. You must also prove how much value your vehicle lost.

Obtain a diminished value appraisal from an unbiased, independent source to use as documentation for your claim. You will then need to file a claim with the liable party’s insurance company and provide a copy of your appraisal.

You must also provide evidence that proves the other party’s negligence caused your accident and the damage to your vehicle. Examples of evidence may include your testimony, statements from witnesses, photos and videos from the scene and a copy of the police report.

Once the insurance company has all the information it needs, it will determine whether it believes its insured driver caused the accident and the damages you are claiming. The insurance company will then pay your claim, offer you a lower amount or deny your claim.

If the insurance company denies your claim or offers a lower settlement, you can attempt to negotiate. If you can’t reach an agreement, you may wish to pursue a lawsuit against the at-fault party.

How Do You Determine the Value of a Diminished Value Claim?

Most insurance companies use the 17c Diminished Value Formula, which originated with a 2001 Georgia case against State Farm Auto Insurance. If using this formula, the insurance company will:

  1. Estimate the pre-accident value of your car by referring to a guide, such as the National Association of Auto Dealers or the Kelley Blue Book or by researching the value of similar vehicles in your area. The market value of your car will vary depending on its pre-loss condition, mileage, make, model and features.
  2. Multiply the pre-accident value by 10%.
  3. Multiply 10% of the pre-accident value by a damage multiplier of 0.25 for minor damage, 0.50 for moderate damage, 0.75 for major damage or 1.00 for severe structural damage.
  4. Multiply the result by a mileage multiplier of 0.2 for 80,000 to 99,999 miles, 0.4 for 60,000 to 79,999 miles, 0.6 for 40,000 to 59,999 miles, 0.8 for 20,000 to 39,999 miles or 1.0 for 0 to 19,999 miles.

Under this formula, vehicles with more than 100,000 miles are not eligible for a diminished value payout.

As an example, if your car was worth $30,000 before the accident, had 20,000 miles, and suffered moderate damage, your diminished value payout would be $30,000 X 10% = $3,000 X 0.50 = $1,500 X 0.8 = $1,200. However, if your vehicle had a previous accident on its vehicle history report, the insurance company may further reduce your diminished value settlement.

How Can a Lawyer Help With Your Diminished Value Claim?

Because New York law doesn’t specifically address diminished value and case law is contradictory, it can be difficult to win a diminished value case. A Manhattan car accident attorney can help you gather the evidence you need to prove your diminished value claim.

Additionally, an attorney can help you prove that the other party is liable for your damages and ensure you receive full compensation for your losses. Your attorney will investigate the facts of your case, gather evidence, estimate the value of your claim and gather documentation to support that value. Your lawyer will also help you file the paperwork with the insurance company or pursue a lawsuit.

Your attorney can also estimate the diminished value of your vehicle so that you don’t have to rely on whatever formula the insurance company uses. If there is a dispute about liability or the value of your claim, your attorney will negotiate on your behalf.

What Other Compensation Can You Receive Due to a Car Accident?

Because of New York’s no-fault insurance laws, accident victims must pursue compensation for injuries through their own insurance. However, if you have serious injuries, you may be able to recover compensation from the other party’s insurance. A car accident attorney can help you determine if you have a claim against the negligent party for additional damages.

Where Can You Get Help With Your Diminished Value Claim in Manhattan?

The car accident attorneys at Cellino Law are available to help you 24 hours a day, 7 days a week. We will answer your questions and guide you through the process of filing and settling your claim. We charge no upfront fees and there is no cost to you unless we recover compensation. Contact us today to schedule a free case evaluation.



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