For many Oregon drivers, their car, SUV or pickup truck is more than just a means of getting to and from work or school. It’s their pride and joy, and when someone crashes into it, causing damage and lowering the value of that vehicle, it’s unlikely that any insurance company will ever offer one of these loving owners what they think their motor is worth.
Any time a vehicle is damaged and repaired, there is a decrease in the car’s market value had it not been in a wreck. This is known as diminished value, or what is also known as accelerated depreciation. This is true of any vehicle, regardless of how well the repair job has been done, because no buyer will pay the same price for a previously-crashed vehicle as they would for the same model that was never involved in a collision.
Diminished value claims
Since it’s not only unlikely; it’s impossible that you and the insurance company will agree on your car’s value, it will probably be necessary to get a diminished value report completed. These reports are done by an (allegedly) unbiased third party appraiser, who will attempt to accurately establish the crashed vehicle’s loss in value after it has been repaired.
When the inspector, who may be an individual or from a licensed auto appraisal company, compiles a diminished value report, they will take into consideration a large number of factors, including but not limited to:
- The amount of damage that was done to the automobile in the crash
- The quality of the repairs carried out
- The market value of the vehicle before the accident
- The likely market value of the vehicle after the accident and subsequent repairs
Because of the vast disparities between almost every car on the road, it is literally impossible to use a set formula to determine diminished values, though insurance companies like to trot one out called Formula 17-C. This formula has been proven time and again to be demonstrably unfair and inaccurate, and not surprisingly almost always works in the insurance company’s favor.
You will need these reports, which will come at a relatively small cost, if you decide to file a diminished value claim with the insurance company. If successful, this will allow you to recover the difference between what the car would have been worth had it not been crashed, and what it is actually worth after it was involved in a collision.
An example of a diminished value claim
For many people, the concept of a diminished value claim can be difficult to understand, so let’s take an example to try to clear things up a bit. Let’s say:
- About 10 months ago, you bought a nice SUV for $30,000, and given your relatively low mileage and the fact that you’ve given this vehicle more baths than you’ve had yourself, the blue book value is holding firm at $27,000.
- On your way home from having the car washed and waxed, a lady who was already wearing too much makeup runs a red light while putting on her lip gloss and slams into your passenger side door.
- The overly nice insurance adjuster asks you nicely to take your SUV to the main dealer, where you receive a quote of $4,500 to make it good as new. The adjuster gulps once and tells you to go ahead.
- The SUV looks great, but you just don’t feel the same about it after the crash, so you put it on the market for $27,000, the blue book price.
- A few people have a look, but when you tell them it’s been in an accident (or they found out by looking up the vehicle history), no one is prepared to offer you a penny more than $22,000.
- The bottom line for you is a diminished value claim of $5,000, because you should have been able to fetch $27,000 for your SUV, but you ended up having to settle for $5,000 less than that.
But I already settled with the insurance company! What now?
Your settlement probably related to the body damage, and while it’s not true in all states, in Oregon you would in almost all cases be able to file a separate claim for diminished value. Be aware that the longer you leave the claim, the more you put that claim in jeopardy.
The last thing you want to have to do after someone has banged up your pride and joy is fight with the insurance companies over what the car should be worth. The insurance companies will throw enough figures and statistics at you that you could get dizzy trying to take it all in.
If you have questions, don’t hesitate to phone a helpful and experienced Portland car accident attorney for advice. The consultation is completely free, and they will be happy to explain to you the ins and outs of a diminished value claim.