Car accidents can be an expensive and stressful affair. Not only do you have to incur the costs of the injuries, you also need to bear the expenses of the car’s repair and its loss in market value. You might be able to cover the cost of the repairs with insurance. However, there are additional expenses that must be considered.
A car’s diminished value refers to the difference between its value in the market before and after an accident takes place. The decrease in this value might also cause a decrease in potential buyers. Thus, a diminished value claim might be able to help you cover this difference and compensate for the loss.
The depreciated value insurance claim might differ from company to company, and you might enquire about the same with the company you plan to insure with. ABE is a place where you can get an insured car with the best service.
If your car has been involved in any kind of car accident, especially a major one, then its market value lessens and so does the pool of potential buyers. Even with high-quality repairs, the pool of potential buyers dwindles because no one would be willing to pay for a car that has a history of damage.
In this case, this difference between your market value before and after an accident is what gives your car a diminished value. You can file an insurance claim for a refund of this difference.
Here are the three types of diminished value claims that you will find:
This claim takes place when the market value of your car decreases after an accident because of the history of damage that gets captured in the car's history reports. After an accident, the market value of the car will decrease even after repairs. It's the most common type of claim that is accepted.
This claim refers to the resale value of your car right after an accident before you get any repairs. It's rarely used because you are mostly likely to get your car repaired right after an accident because of the lower damage repair costs offered by insurance companies.
This claim refers to the decrease in the car's value when repairs are done with low-quality parts. For example, if you replace the parts of one car brand (e.g., Mercedes) with a generic part rather than the original, then it results in a loss of the value of the car.
Once a car has been in an accident, its market value decreases because of the damage and based on the repairs. If the repair is not able to return the car back to its original value, then a diminished value claim is attached to the car. Based on the damage and the car's condition, you can file a Progressive diminished value claim.
One question that might strike you would be: does insurance cover diminished value?
When your car is involved in an accident, there is a chance for you to receive some compensation for the repairs. You can file a diminished value claim depending on the policies set by the insurance company and the state. It also depends on the person liable for the accident. Depending on this factor, you might get paid the diminished value or not at all.
So, if you're not responsible for the accident, you’re more likely to get paid the diminished value. You can even pursue their insurer and receive compensation. If you’re responsible for the accident, it might be hard to receive a claim.
For any person who is uninsured, you can consult your insurance company and work from there.
There are two ways to determine your car’s diminishing value:
Specific consultation companies work to give you an evaluation of your car’s diminished value. A reputable company will give you an accurate estimation of the car's market value in this case.
The internet is your treasure trove of information. You can look-up your car's value on reliable websites, and it can give you an approximation of your car’s valuation. Then you can get the trade-in value of your car after the accident and get an estimate of the diminished value.
The bottom line is that your car insurance covers a diminished value claim in most cases. You might have to do a little bit of research on your part and ask to choose a type of insurance company, what they offer and any alternatives they might have.
Determine who was responsible for the accident and find out the terms and conditions of your insurer as well as the policies set by the state. Ensure your documents are in order and you have an estimate of the diminished value. Then you can file a claim with the insurance company and await their response.
The diminished value of your car is the difference between its market value before and after an accident. Depending on the situation, your insurance company might provide a diminished value claim.
You'll have to gather the details of your car, its model, its make, and year and document its diminution. The requirements are also based on the state's laws and insurance companies, so you might have to check in with them to see what the requirements are.