The answer is, maybe, depending on how hard you can fight and the amounts of insurance coverage to pay, as discussed. To begin with, a car that has never crashed could lose significant resale value even when repaired after an accident.
So let’s start—no question about it, in California’s car culture, our whips reign supreme. As Los Angeles personal injury lawyers, we find that many of our most severely injured clients are more concerned about their autos than themselves.
And when one of our clients owns a classic, custom, or sought after brand name cars like a Mercedes S-Class, or BMW M-5, many owners complain that:
“My car is no longer cherry,” or “I will never get what my car is worth now, can you get me money for the loss of value?”
Many of our clients are shocked when they discover that the defendant’s and even their auto insurer will fight tooth and nail to pay far less than a car is worth, let alone pay money for its lost value. Most insurance adjusters are professional wordsmiths and taskmasters.
They will argue that even though automobile insurance covers your vehicle, all you can get is enough compensation to restore your vehicle to its same look before the collision.
And since injury lawyers don’t usually get part of the property damage payout, they are not exactly excited about going to bat for you to get more. As such, only the savviest and most sophisticated personal injury lawyers understand or even care that a car, any car, automatically loses its worth after a crash. Even a high-end vehicle insurance adjuster will argue with owners about filing a diminished value claim to recoup the loss of their car’s value after a wreck.
In a nutshell, a diminished value claim is when a car owner or their lawyer demands the difference between their model’s current market value and the car’s make before the wreck. But there are many types of diminished value claims for a vehicle, as discussed below.
Like it sounds, repair-related diminished value has to do with the loss of your car’s value due to the repairs themselves. Most of all, it has to do with a repair shop’s failure to use OEM, original parts, and instead use aftermarket parts or supplies. Many leasing companies will ding you for any post-accident repairs made with low-end parts or related items. So it’s not just vehicle parts. What if your repair chop used Chevy paint to spray the repaired area, instead of the original, factory Mercedes Benz paint, for example?
Maybe the paint is the wrong color or looks like an orange peel pattern? Or how about when the repairman uses a non-original bumper, or headlamps, etc.? So basically, you have two issues with these cases.
One issue is the repair’s quality, and the other is the items used to make the repairs. In either situation, low-quality goods and services mean a lesser value at the market when the vehicle is listed for resale. And this is particularly the case with a classic car, such as a 1957 Porsche 356 A, for example.
Super cherry car like that, even if you can find the original parts, will never get the market’s full value because it is no longer cherry. So how do you reconcile all of this? First, you need to look at the coverages and exclusions for your insurance policy. If you don’t have full range, the other party may not have enough to cover all the damages, let alone enough to pay the diminished value. So when a car cannot be restored to its original condition, what happens?
Most of the time, the insurer will argue that they will only pay your car’s depreciated value. This is normal in cases of a total loss. But that is a non-sense argument because it does not address that a crashed car, even when depreciated for everyday wear and tear, is still diminished in its actual value compared to a used car that did not hit. Eventually, if you fight hard enough, the insurer may finally attempt a 17c calculation, discussed below.
Generally, an insurer will try and pay what’s known as the “inherent diminished” of your car. And that happens when a motor vehicle loses value because it now has a history of damage, indicated in the car’s title. But this type of diminished value claim might ignore that the wrong paint or parts were used, as discussed above.
So, in that case, the insurer is underpaying the claim. Moreover, this remains true regardless of repairs after the accident because the repairs were not legitimate and wrongly made.
This claim is rarely deployed since most people don’t take a property damage claim to court. Here, the resale value before the damage and immediately after gets calculated by the auto’s insurer or a court.
Since the insurer was directly involved in adjusting and controlling the repairs and claims adjustment, the insured or third-party claimant will argue the repairs are completed wrongly or not. Because of this, the vehicle is not in the proper condition to achieve a par value sale.
As noted above, a formula known as 17(c) will often be utilized to determine the amounts due and owing for a typical diminished value claim.
“Most insurance companies use a calculation known as “17c” to arrive at a monetary value for your car in post-wreck condition. This formula was first used in a Georgia claims case involving State Farm and derives its name from where it appeared in the court records for this case – paragraph 17, section c.” (Source).
Let’s look at the steps you or your lawyer need to calculate the 17(c) diminished value below.
Below is the typical scale used by adjusters to achieve step 3:
4. Utilize the mileage multiplier – The insurer will calculate a mileage deduction based upon their formula. The auto’s adjusted value discussed in step 3 above gets multiplied using the mileage multiplier. Hence, the diminished value of the automobile boils down to this formula
Many people have now started to believe they know a lot about car accident claims. Mostly they have read the information on the internet about suing and getting money. This belief couldn’t be more wrong. The misinformation from insurance companies keeps people from knowing the truth of the matter. While filing claims for the vehicle damage done accidentally, most people completely forget about the diminished value.
If you or your loved one’s car got wrecked in an accident caused by another driver’s negligence, you have a diminished value claim. Should you go for it? Are you prepared for the hassle of handling this matter? Is this case worth all the time and energy that will get spent on it?
The short and easy answer to all the questions is that you must go for this claim. This is because it is worth every second of your effort and struggle to negotiate from strength. Here are some common reasons below. These cover why so many people don’t fight to compensate for their cars’ diminished value after wrecks.
They will frustrate your making claims for the damages done to you and your car in a wreck.
Due to insurance companies’ unwillingness to pay the diminished value of cars’ claims, things can worsen. For example, when you try to file this claim. It is to say that the case will be nearly impossible for you to handle. But you will need to talk to an experienced lawyer and see the potential of the claim.
Not pursuing it at all is not advisable. It would help if you kept in mind that every dollar lost in your vehicle’s resale value means money coming out of your pocket some time or another. Whether or not you want the wrongdoer to pay for it depends on your take on the case.
Did You Suffer A Car Accident Personal Injury In Another City Closer To You? Check our other nearby locations and meeting places in Northern and Southern California as follows: Glendale car crash attorneys, Long Beach auto collisions, Torrance Automobile Accidents, West Hollywood traffic collisions. We are also near the dangerous Rodeo Drive as Beverly Hills car accident lawyers helping consumers and people getting run over.
Here are some additional answers to frequently asked questions: