Diminished Value Claims are a way for you to recover the decrease in the value of a vehicle after a crash and repairs. Often, even serious damage to a vehicle can be repaired. No matter how well the repairs are performed, many potential buyers will view the vehicle as less valuable because it has been in a crash. Virginia is a Diminished Value State. This means that you may be entitled to recover the diminished value of your vehicle after an auto accident.
What is Diminished Value
Diminished value refers to the difference in the value of a vehicle that has not been in an accident or otherwise damaged and the same vehicle after it has been damaged and repaired. That difference in value may be minimal or it may be significant. Often the difference in value is determined by (1) the nature and extent of the damages to the vehicle, (2) the original value of the vehicle, and (3) the age and model of the vehicle. Another important factor in calculating the value of the vehicle might be the fact that it is a classic (or collectible) car, extent of damage to original parts, and other unique characteristics or features of the vehicle.
In Virginia, “Diminished value compensation” means the amount of compensation that an insurance company pays to a third party vehicle owner, in addition to the cost of repairs, for the reduced value of a vehicle due to damage.” Virginia Code 46.2-1600
An old, rusted out low-end Ford that has some body damage after a crash will likely not suffer significant loss of value after repairs. The difference in the value of a classic Lamborghini in perfect condition with all original parts will likely be significant after a crash and repairs made with new knock-off parts.
The statute of limitations on a diminished value claim in Virginia is 5 years (you must file the claim within 5 years of the crash). Virginia has uninsured motorist coverage for diminished value. You can only file a diminished value claim if you were not the driver at fault for the crash. The damage causing diminished value must be from a crash (and nothing else).
The Commonwealth of Virginia recognizes two types of vehicle property damage claims under vehicle insurance.
- A “first party” claim is made when you file with your own insurance company for damages resulting from an accident in which you or someone driving your vehicle is at fault.
- A liability claim is made when you file with the other driver’s insurance company because the other driver was at fault in the collision. Diminished value claims can only be filed in liability claims.
What You Need to File a Claim
Most insurance companies doing business in Virginia are aware of the diminished value claim. They negotiate these claims regularly when they are presented by the owner of the vehicle that has been seriously or extensively damaged in a crash. However, it is unlikely that the insurance company will suggest that you file a diminished value claim. They must respond in some way when a claim and proper documentation is filed.
What is proper documentation? There are three essential elements of documentation of a claim:
- Pictures of the damages to the vehicle.
- Pictures of the vehicle after repairs are made
- A written appraisal by a qualified appraiser of the condition of the vehicle and the lost value due to damages sustained in the crash.
If you are working with an attorney and preparing a personal injury lawsuit, your attorney will probably calculate diminished value into the damages demanded in the suit. If you are uncertain, simply ask the attorney if a diminished value claim is being filed.
If you or a loved one is injured in a vehicle crash and your vehicle has been seriously or extensively damaged, you may be entitled to appropriate financial compensation for your hurts and harms, as well as vehicle and other damages. Call Altizer Law, P.C., to discuss your case with us. Bettina Altizer and her team of experts have helped people to recover maximum appropriate settlements for more than 30 years.