Diminished Value Claims: Insurance Companies' Best Kept Secret
How insurance companies can withhold thousands of dollars in your settlement value.
Was your car recently repaired after sustaining damage in an accident? If so, your vehicle is worth less than it was right before the accident.
Even if you restore your vehicle to near-perfect conditions, the value of your car will drop. This drop in value is due to the mere fact that your car was involved in an accident.
There is a way you can recover this price difference, though. And that is through a diminished value claim.
Insurance companies make it difficult for individuals to make a diminished value claim. However, we’ll provide you with steps you can take to make a successful claim.
What is a diminished value claim?
A diminished value claim is a way to recover the reduced value of your car after an accident.
As mentioned, your vehicle will experience a decrease in value following a car crash. This decrease in value occurs even if quality repairs were made with original manufacturer parts.
Any car accident becomes part of your vehicle’s history report. There is nothing a repair shop can do to erase this history. The stigma of a car crash will remain with your vehicle for the remainder of its lifespan.
For this reason, your car’s value could drop hundreds, if not thousands, of dollars in value.
A diminished value claim compensates you for this drop in value.
Why make a diminished value claim?
Three reasons why you should consider making a diminished value claim:
- It’s your right: Under Nevada law, you have the right to be compensated for the loss in value of your vehicle after an accident. It is the job of the insurance company to ‘make you whole’ – to restore your vehicle to its pre-accident state as much as possible. This includes compensating you for your vehicle’s decreased value.
- Resale: If you decide to sell your vehicle in the future, you’ll receive a much lower offer after an accident. Dealers and prospective buyers will automatically discount your car’s value once they find out about your vehicle history. Even if it was in prime condition, the sole fact that it was in a car crash would deter buyers.
- Leaving money on the table: By not making a claim, you could be leaving hundreds to thousands of dollars on the table. Of course, insurance companies do not advertise this fact. They are banking on the fact that the average person will not go through the process of claiming the diminished value they are entitled to.
Requirements for making a diminished value claim in Nevada
Here are some basic requirements for making a diminished value claim in Nevada:
- Accident caused by another driver: If another driver caused the accident, you are eligible to make a diminished value claim. Since the other driver was at fault, he or she must take responsibility for repairing and paying the difference in value.
- Claiming through the other driver’s insurance: You cannot make a diminished value claim through your own insurance in Nevada. To make a claim, you must submit the claim to the at fault driver’s insurance.
- Proof of diminished value: You must prove your vehicle is indeed worth less after your accident. You can do this on your own through online resources, such as Kelly Blue Book or Edmunds. Obtaining an expert opinion from a professional car appraiser would also be a way to prove diminished value.
Obstacles to making a diminished value claim
Despite all the benefits, making a successful diminished value claim is rare.
The reason is simple: insurance companies are not in the business of giving away money so easily. They exist primarily as a business to make a profit.
Not many people are aware they can make this claim because insurance companies don’t want the public to know.
For those who are aware, insurance companies make it extremely difficult to make a successful claim. Even if successful, insurance companies will often severely underpay diminished value claims. It is not unheard of for people to get offers of $200 to $300 when in reality, they should be receiving closer to $2,000 to $3,000.
If your vehicle sustained damages due to another driver, you are entitled to make a diminished value claim.
While it’s not easy, there are steps you can take to receive the compensation you deserve. We have developed a comprehensive guide for you to seek compensation on your own.
This guide details out step-by-step what you need to do to make a successful claim.
From determining the value of your vehicle to filing the initial claim to dealing with the insurance company, you’ll understand what you need to do to recover the deficiency in your car value.
Download our guide to get started!