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Accidents bring more damage than dented cars and physical injuries

DEFINITION:  Diminished Value – The after effect of a car accident on the value of your car, even after repairs have been made.

A common problem with car accidents is that your car goes down in value even after it’s been repaired.  That’s right, even after the car is fully repaired to factory standards, you suffer from something called “Diminished Value”.  In short, it  means that after your car has been in an accident it is worth less than a similar car that has never been wrecked.  So even though you may collect damages for the actual repairs (if the accident was not your fault), you will still lose money when you go to sell or trade your car.

If the auto accident was our own fault and we get it repaired through our collision coverage, there is little we can do about diminished value.  That’s because most insurance policies exclude “diminished value” claims.  And when we buy an insurance policy we are legally agreeing to those terms.

However the situation changes when the damage to our car is caused by someone else.  In that case, we can go after the other party for diminished value, unless your state law does not allow for those claims.  By the way, Colorado does allow us to seek diminished value.

Going after diminished value sounds easier than it is.  You don’t simply put in a claim with the other party’s insurance company and get a check.  You first need some proof of diminished value.  Then, even after providing proof, the other insurance company may just reject that claim immediately.

So what is the proper way to seek damages for diminished value?  Here are some steps:

  • Find a auto-value expert (many dealerships have them on staff).  It is usually the person in charge of evaluating trades.
  • Ask for a very specific appraisal of your car just prior to the accident.
  • After your car has been fully repaired, get the value of the car in it’s current condition (given the history of a car accident).
  • If the car is worth less after the accident and after it has been repaired, you have evidence of diminished value.
  • And you need evidence before you can bring a claim.

There are two ways to bring a diminished value claim.  The first thing to try is to present your evidence to the other party’s insurance company and simply ask for damages.  Presumably you already have a contact there because they have been processing your repair claim.  If they reject your claim, the next thing to do is turn up the heat.

Next, file a lawsuit against the other party directly.  This lawsuit can be brought in small claims court if it is under $7,500.  If more than that, you need to go to county or district court.

Be prepared for some reaction.  when you file suit against the other driver, his insurance company has an obligation to step in and defend him and therefore they must talk to you.  However, they will not usually make  an offer right out of the gate.  They will usually try to intimidate you in an effort to get you to drop the claim.  They will often move it outside of small claims court to a higher court.  That’s OK, even if you can’t afford an attorney, the higher courts must let you represent yourself with the same relaxed rules and procedures of small claims court, providing it was you who brought the original action in the small claims arena.

Diminished value claims are not difficult to prove especially if you gather evidence from experts who have the job of evaluating trades.  Usually if you persist, you will get something … and something is better than nothing!


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