how to determine diminished value?

[Jerry Johnson]

My wife was hit by a drunk driver a couple of months ago in her 04 Volvo S60. Fortunately the driver was insured. My insurance agent told me that the other parties insurance should pay us not only to have the car repaired but also for diminished value of the car. Because the car has been involved in an accident, it will never be worth as much as a vehicle that has not been involved in an accident. Does anybody know how to determine what is a fair dollar amount for the “diminished value” of the car? Any ideas welcomed.



Thanks,

Jerry

 

[Kevin Palmer]

Just Googled "Diminished Value".

Got many links back. So included a free value based on your input of data.

 

[Matt Day]

Disagree with Q. If you had your choice of buying a vehicle that had never been in an accident or one that had significant damage, which would you pick? Diminished value is paid in addition to the repairs quite often (I work in insurance claims)- Don't bother paying one of the online companies to come up with a report for you. Take a copy of your repair invoice to a couple of different dealers and have them tell you what the value is. Take what they say with a grain of salt, they are (of course) trying to get your car as cheaply as possible. Try to get them to put it in writing and take those to the insurance company and let the negotiations begin. You're in a pretty good postion since their guy was drunk. They won't want this going to court.

 

[Wes Davis]

I am an insurance adjuster for homes and am also currently involved in my own auto claim. Being in this business I have never heard of an insurance company paying for "diminished value". If you are going to try and collect this you will have to do it in court.

 

[Nelson Atwell]

I agree with "Me". There is no way you can claim diminished value. It isn't the insurance company's fault that people won't pay as much for a wrecked car as they will pay for one that has not been wrecked. It's just like when you drive a car off of a new car lot. Even though you bought it for $40K, the value dropped to $35K as soon as you drove it off the lot, because people will want to pay less for a used car.

 

[Dale Carter]

Jerry - Your company is giving you good advice and posters who say otherwise are not well informed on this subject.



Diminished value payments are common in automobile accident adjustments, the theory being that a wrecked vehicle is not worth as much as an unwrecked vehicle. While we all understand that a properly repaired vehicle is as good as an undamaged one, the plaintiff attorneys disagree with us, as do millions of Carfax customers.



Also referred to as "diminution of value" (lawyers like to speak a different language donchaknow), many states require it to be paid by the insurer to the claimant. Georgia, for example, has a formula that prescribes DV by statute and it is required to be paid to damaged claimants. In the terminology of auto claims the insured in this case is the drunk (who is also a claimant but may not be entitled to DV) and the claimant is your wife. If not required by statute in your state, many insurers may still pay a dv settlement just to avoid litigation.



I have sold over 200,000 insurance total loss vehicles in my career (about 13,000 in 2005 alone) and deal with auto adjusters from a broad spectrum of companies on a daily basis. Also, the Trac was hit on I-20 last year and the insurer paid my estimate (not theirs), a rental car and DV. I didn't even ask for the dv, but they were complying with Georgia statute.



Your agent is giving good advice and should be able to assist you further in geting your settlement.



Curious, which companies are on each side. I only ask becasue some companies are far more combative and aggressive than others.

 

[Ernie Longino]

Insurance companies will pay for what I have heard called "Loss of Value", but in my experience you have to bring it up. I received 25% of the total loss (I believe this to be the standard, at least in Alabama where I lived at the time). The other party must be ruled to be at fault and your automobile must be fairly new (2-3 years old ... mine was a little over a year old).



In my experience, the 25% doesn't come close to covering the total loss of value, but it does help.

 

[Chris Wofford]

As Dale indicated, Georgia does allow it. Depending on your state, you will have a hard time proving it and I think most carriers will not pay it if it is not required. The other company may request proof of other vehicles similar to yours that have been wrecked and sold for less than vehicles that were not wrecked. The problem is if you are a seller you think the value of the vehicle is not less just because it has been wrecked. However, if you are the buyer you will argue that it is now worth less because you are trying to get a better price.



It will not hurt to ask. If the company has treated you fairly in everything else, I would not make it a huge issue. Probably in the end it would not be worth the effort.

 

[Dale Carter]

BTW, the percentage of cars over 5 years old which have been in a collision requiring body panel replacement or "significant" (the term used in the study, not mine) repair is in the 80%+ range.

 

[Bill Ellis]

That 80%+ statistic is probably as accurate as the 6 million missing children we read about a few years ago. So Mr Carter, please provide the source of your profound knowledge.

 

[Jerry Johnson]

Thanks for the many inputs.



Dale, the other guys insurance is GEICO. It has been a battle getting GEICO to pay up. At first they refused to do anything until they interviewed the guy that hit my wife. Well he was in jail (they also found drugs in the car) and he was not going to call GEICO. Even after I faxed them a copy of the police report they still dragged their feet in providing a rental car or estimate for damages to the car. The only thing that got them into action was the fact that ambulance chasers were calling us wanting our case. Mother with an infant in the car gets hit by a drunk driver. Guess who would win that case? GEICO has been a big disappointment. I do believe that I am entitled to some dollar amount for diminished value to the vehicle. The vehicle will never be worth as much as a vehicle that has not been involved in a collision.



Thanks,

Jerry

 

[Kelly Hayes]

 

[Kelly Hayes]

Go for the DV.



The website below is the DV expert that I am using.

A co-worker of mine used this service collected several thousands dollars on his claim.



Insurance companies will play or give you a very low offer of DV to settle the claim.



You have to be stern and stay after them.

 

[Dale Carter]

Bill-E - i had the same reaction when I first heard that number. The number came from an industry report which I read about a year ago and no longer have in my possession. I don't recall if it was NICB, ASPA, insurance underwriters, collision repair or other source, but the percentage stuck in my mind.



Here is some math with rough numbers (I err on the conservative side so as not to overstate). There are over 3 million total loss automobiles sold at auction each year (two companies combine for approx. 1.5 million). Given that 10 - 15% of all collisions result in a total loss, that is between 20 and 30 million collision damaged vehicles per year. There were 132.4 million registered vehicles in the US last year (http://www.infoplease.com/ipa/A0906736.html). I hope my math is right, my mental calculator may have dropped a decimal point.



It seems high until you think of the HUGE numbers (about 100 million) of vehicles on the road over 5 years old. That is all vehicles model year 2001 and older.



I agree about the bogus missing children number, that number doesn't pass basic math and common sense. In 2003, there were 73 million children ages 0–17 in the United States (source http://www.childstats.gov/americaschildren/index.asp) so that would mean that almost 1 out every 10 children was missing. The question I would ask is "How many people do I know who are missing a child? Why have I not heard of the 185 missing kids at my local high school?". Also, that stat is driven by an agenda to either pass legislation or raise money. Always run the numbers, check the agenda and see if it passes the smell test.

 

[Nelson Atwell]

That missing children number is probably misleading. Most of the missing children are not lost out on the streets. They have been taken away by one of their parents in a custody battle.



I know a few people with children who have no idea where they may be. Unfortunately, this will become more common as the nuclear family further disintegrates. It's pretty sad to know that nearly half of the kids today do not live with both of their parents. Heck, I have a cousin who has two children, and she doesn't even know who the dads are (she is quite a loose girl, and apparently the guys in Kentucky don't care that she weighs 250 lbs).

 

[Dale Carter]

NelsonOKC - I share your concern (disgust?) with the family situations that kids are raised in these days. I saw an article from the 50's expressing shock and concern over an illegitimacy rate of 15% in urban Chicago. I wonder what the authors would say today? Since high school I have realized how fortunate I was to grow up in a household with both parents, food, safety and security. I was blessed. I know some awesome single parents, mostly mothers, but I wonder how my life would have been changed by the absence of either parent.



The parental custody thing is a twist that we didn't see so often in my childhood.



Question - Is you cousin missing her front teeth, that would explain a lot HAHAHAHAHA



Kentucky, where the men are men and the animals are worried. :lol:

 

[Wes Davis]

Ok then does anyone have any info on DV laws in Florida because I am in a claim right now.

 

[Rick Kent]

The Georgia law that is being referred to is for First Party claims. Meaning by formula, you are entitled to present a DV claim to your own insurance company even if you are at fault.



Every state recognizes 3rd party DV claims. It is an element of damages. What was the fair market value of the property prior to loss? What is the fair market value after the loss? The difference being the DV.



If you have relatively minor cosmetic damage with replacement of the damaged part, your potential for DV is small. If you have a vehicle that sustains more significant damage including unibody damage and there are remaining telltale signs of the repair job (misaligned body panels, trash in the clear coat, drips in paint, overspray, pinch weld marks on the unibody...) you have a greater DV claim.



Class adjourned...

 

[Richard L]

Having worked for the largest automobile insurance company in Texas, I can assure you that "Dimished Value" is real even though insurance companies do not like to mention it, let alone pay it!



In nearly all cases you will need to haave an attorney represent you to negotiate a "Diminished Value" for your vehicle. You will end up paying about 30% of your award to the attorney, however they can usually get their fees included in the award if they win.



...Rich

 

[Dale Carter]

RichardL - ironic that my claim was paid by Texas Farm Bureau. They started out questioning their own liability when their insured rear ended me on an Interstate highway on a clear day with very little traffic. They tried really hard to not pay me until they found out what I did for a living and they got VERY cooperative. My whole family has spent the last 30 years handling insurance automobile total losses. Good thing I knew my rights and what to say to them.