What is Loss in Value?Loss in value, sometimes called "diminished value" or "diminution in value", is the damage a person suffers when their car becomes less valuable after an automobile accident.
For example, Driver A is at fault and hits Driver B's car. Before the accident, Driver B's car was worth $20,000. Now that it has been in an accident, Driver B's car is now worth $15,000. Driver B has suffered a loss in value damage of $5,000.
When Can I Recover Loss in Value?Each state handles loss of value damage claims differently. In general, you can recover for the loss in value of your automobile if:
- You were in an accident,
- You were not at fault,
- You can show your vehicle's value went down because of the accident, and
- You suffered some damage as a result.
In some states, the proof that the vehicle's value went down because of the accident is easy to prove. What is more difficult is the proof that you suffered damages. Some states require you to show that you planned on, or were considering selling the vehicle before the accident. If you never planned on selling the vehicle, what difference does it make that is it worth less? How Much Can I Recover?The amount of recovery for loss of value is generally restricted to the fair market value of the vehicle before and after the accident. Determining the fair market value is a very difficult task. Some states will look at an insurance company's comparable payments, while others will look at an independent source like the Kelley Blue Book value. Insurance policies may also have clauses that limit when and what can be recovered for loss in value.
Are There Any Defenses?As already stated, each state handles loss of value damage claims differently, and as such, different defenses to a claim are available. The most common include:
- Contributory negligence,
- The vehicle was restored to comparable condition,
- The value of the car was not lost in the accident,
- The car was totally destroyed, and
- The value of the car was less than the amount being asked for.
Do I Need an Attorney?If you were in an automobile accident and are trying to recover loss in value for your vehicle, it is a good idea to contact an attorney who specializes in insurance law because insurance companies can be extremely difficult to deal with. Only an attorney will be able to guide you through the process, explain the relevant issues, and help defend your rights. |
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