Diminished Value for Insurance Claim

Pat S · 09-14-2006, 05:21 PM

My wife was rear ended at a stop sign today. She's fine and it appears the damage is only to the rear bumper, associated bits and reverse sensors of the car. I'd guess $1-2K in damage if repaired by a good shop. (If anyone has any reccomendations in the Dayton/Cinci/Columbus area please let me know.) However the car is a brand new 2006 Volvo S60R that we have only had for five months.

Police report confirms 100% the other guys fault. He though she was going to roll through the stop sign so he hit the gas to jump out with her and when she stopped he hit her. We haven't talked to his insurance company yet.

So what do I need to take into consideration here? What do I need to know about diminished value? Since carfax will now show this car as having been in an accident, I assume it's value just dropped. This was a $45K MSRP car and has just barely 10,000 miles and is only 5 months old.

Thanks,
Pat

schamp · 09-15-2006, 03:37 AM

The insurance company is going to try and rip you off. Don't sign anything and get it repaired where you want it fixed. Not where they tell you. Its your car. Don't let the insurance company record any part of your conversation or at a meeting. If they give you a problem tell them you will be happy to sue the guy that hit you. They work for him, remember. If you let them record a conversation either on the phone or in person, put on the tape that the recording is not to be used in any court proceeding and that it is only for record keeping and interoffice use. At the first hint of crap from the insurance company get your lawyer involved. You will be suprised how quick they straighten up. And yes, their is diminished value. Have you lawyer check the case files for Georgia and State Farm. They got their a-- cleaned over here on that exact issue. State Supreme Court upheld the lower court. Good luck.

legion · 09-15-2006, 05:03 AM

The issue here is whether a properly repaired car is worth less. The answer should be no, but because of widespread shoddy work from body shops, a repaired car often does not meet "new" standards.

asphaltgambler · 09-15-2006, 05:35 AM

I disagree on this. I think that any damaged vehicle has less perceived value after the fact even when reapired properly.

Regardless of how good it looks now if the seller discloses it or it shows up in carfax the buyer will feel less inclined to buy it. There are plenty of vehicles to pick from out there.

Buying a vehicle still has somewhat of an emotional tie-in.

I would say minor damage would diminish the resale by 10-15%
Major damage may devalue more than 25%

legion · 09-15-2006, 05:45 AM

And why should insurance cover that? You pay premiums to repair a vehicle, not to compensate you for some perceived loss of value.

It's much like the people who didn't buy flood insurance claiming their home insurer should cover flooding damage anyway. Losses that premiums were not paid for are not covered, end of story.

ChrisBennet · ChrisBennet's Garage

Quote:

Originally posted by legion
And why should insurance cover that? You pay premiums to repair a vehicle, not to compensate you for some perceived loss of value.

I disagree. I buy insurance to make me "whole" minus my deductable. It isn't a "perceived loss of value", it's real.

Someone will pay you less for you car if it's been in accident or avoid buying your car altogether and they have valid (not emotional) reasons for doing so. Is there anyone who doesn't ask "Has it ever been in an accident?" when buying a car?

-Chris

legion · 09-15-2006, 07:03 AM

Let me put it this way:

You go to Wal-Mart and buy a bowl and a spoon. Essentially the arguments I'm hearing here are that Wal-Mart should have known you wanted a bowl of cereal, and should have given you milk and Wheaties, even though you didn't pay for those.

I think insurers should offer diminished value coverage (which they don't, as far as I know), but that it should be up to the consumer to buy it.

Insurance doesn't "make you whole", it pays you for covered losses when they occur.

Don Plumley · Don Plumley's Garage

1) Use a Volvo certified body shop. These things have gotten really complicated - mine needed two trips back to the dealer in the process to reset the computer, etc. - they took care of all of that transparently. The other insurer will steer you towards their shops. They'll tell you that if you use their shop, you won't have to pay your deductable and then wait to get reimbursed. It's worth the wait. The Volvo certified shops typically offer a lifetime warranty on the repair to the original owner. And make sure the other insurance company picks up the full cost for the rental car.

2) Good luck with diminished value. We had a $10K rear-ender to my wife's XC90. The concensus is we'd be lucky to get it. The process is to get two sales managers at two different dealers write you a letter stating the new valuation and difference if you sold/traded it just before the accident. Then you need to be persistent and patient with the other party's insurer. I would not however pursue this until after you have your car fixed.

Pat S · 09-15-2006, 07:09 AM

Thanks for the tips guys.

I will be having it reaired at a shop of my choosing.

I agree that even when it is minor damage, I would always offer and expect to be offered less for a car with any accident history than a clean one.

Also, if my wife or I was at fault I would not feel the need to claim diminished value, but since someone else did the damage in this case. I don't feel that I should have to take a loss for their poor driving decisions.

Pat

Don Plumley · Don Plumley's Garage

There's a lot on this over on Rennlist. Here's my thread and a whole bunch of threads.

RallyJon · 09-15-2006, 07:22 AM

Quote:

I think insurers should offer diminished value coverage (which they don't, as far as I know), but that it should be up to the consumer to buy it.

Agree completely.

And on some cars (like pristine, low mileage Porsches with original paint) even a single panel respray from a bad ding counts as a "story" and the value of these cars is tied being original an unmolested. So an accurate diminished value assessment would be several thousand dollars.

It's kind of like when you turn 100k miles. Going from 99998 to 99999 cost you 10¢ in depreciation, but the next mile can cost you thousands.

KFC911 · 09-15-2006, 08:44 AM

A little over 20 years ago, I was rear ended in my 5 week old car (icy roads). I simply asked the other driver's insurance guy for diminished value compensation (I referred to it as 'before & after' back then on the advice of a college buddy in the biz), and I received a check for approx 20% of the purchase price.. No questions asked, no doc required. YMMV, but it doesn't hurt to ask.