Diminished Value Settlement
Getting your car fixed after an accident may only solve part of your problem.
If you're ever hit and your car has lots of damage, you need to understand diminished value. Eventually that accident may cost you money, but it's money that you can have now if you know how to get it.
Vince Sheehan an independent insurance adjuster explains: "A diminished value is when a car is wrecked and repaired, and they go to sell it and then the buyer or the dealer determines that the car has been wrecked and repaired. The resale value drops." In other words, would you pay full price for a car that once had lots of damage?
Sheehan says there are two unofficial formulas for determining diminished value. You deserve either 25 percent of the repair bill or ten percent of the car's total value. "A little $1,000 wreck won't have as much diminished value as a $15,000 wreck."
And there are other rules. The car must have structural damage, not just little dents. Junky or high mileage cars don't get it. And you can't get diminished value from your own insurance company. It comes only from the car that hit you.
Sheehan says you need to take steps to make sure you get it. "Tell them that that you are fully aware that you have a diminished value and that you would expect to get 'yea' number of dollars and let them make a response to that."
But the important thing is that you have to ask for it. Insurance companies will rarely simply include it in a settlement. So if it's serious damage and the other guy is at fault, ask for a diminished value settlement.
Story Posted: 11-05-2002 at 2:26 PM MST
Last Modified: 12-04-2002 at 5:31 PM MST