As a personal injury attorney, I've seen the following situation countless times. Your car gets crashed into by a negligent driver and now your car is damaged. An adjuster from the at-fault insurance company comes out to look at your car and assess the damage. After looking at your car, the adjuster tells you your car can be repaired. So, the good news is that after your car is repaired, it has been restored to the exact condition that it was in before the accident, right? Case closed? Most insurance companies and personal injury attorneys that do not see any value in fussing over property damage would say yes. Nonetheless, they would all be wrong. This article discusses the rarely considered diminution in value claim that is available to those whose cars are damaged by a negligent driver. Percentage-wise, very few folks make diminution in value claims simply because they do not know that they have a right to make such a claim.
WHAT IS DIMINUTION IN VALUE?
If you have been in a crash and hoped that the insurance company would total your car because you know that your car is never going to drive the same and that the value of a wrecked car that is repaired is worth less than a car that has never been damaged in a wreck, then you understand why it is necessary to make a diminution in value claim.
When your car is damaged in a collision, Colorado law requires that you are reimbursed for the cost to restores your car to the same condition and to the SAME VALUE that it had before the crash. Of course, how often does a major repair to your vehicle after a car accident not diminish the value, even a little, from its pre-wreck condition? The answer to that question is nearly never. So, how often should the insurance company simply write a check to ONLY the auto-body shop after your car is damaged in a collision? The answer should be the same as my previous question, nearly never. However, how often are diminution in value claims actually filed? Statistically, these types of claims are hardly ever filed. In fact, many claim adjusters from insurance companies have told me that our clients never make a claim for diminution in value until we demand it on their behalf.
HOW DO YOU MAKE A CLAIM FOR DIMINUTION IN VALUE?
It is your responsibility as the car owner to prove your claim. Nonetheless, diminution in value claims are fairly easy to prove if you hire a car appraiser. Once your car has been damaged in a collision, it is easy to find a local car appraiser because appraisers are plentiful in the phone book and on the internet. Appraisers are qualified to value your car assuming that your car has not been involved in numerous car accidents. A car appraiser can easily calculate the diminution in value of your repaired car and prepare a report for $100 to $150.
WHEN SHOULD YOU (or your lawyer) BE CONSIDERING A DIMINUTION CLAIM?
Diminution in value claims should be carefully considered in any case where the insurance company does not total your vehicle. On some occasions, if you are asking your own insurance company to repair your vehicle, they might refuse because your policy might not allow for diminution in value claims. Nevertheless, a diminution claim is always viable against an at-fault driver's insurance company.
HOW DO YOU PRESERVE YOU DIMINUTION IN VALUE CLAIM?
When your car is damaged in a collision, it goes without saying that your prime objective is to get the at-fault driver's insurance company to approve and pay for the repair of your car. Some insurance companies require you to sign a property damage release before they authorize repairs. Others will hand you a check that says "full accord and satisfaction." Both approaches are potentially fatal to your diminution in value claim so you must be careful when negotiating the repair of your vehicle with an insurance adjuster.
You are really not in a position to make a diminution in value claim until after your car is repaired. Generally, your claim requires an inspection from a car appraiser after it is repaired. Consequently, when your car is damaged in an accident, you should consider early written communication with the adjuster stating your intention to reserve the right to make a diminution of value claim. Furthermore, you should not sign any property damage release without adding language that preserves your right to a subsequent post-repair evaluation for your diminution in value claim. Remember, you should always be careful about depositing any check from an insurance company that includes a restricted endorsement or that comes with a letter that states that the issued check is a full and complete resolution of all claims for property damage.
WHAT IF THE AT-FAULT INSURANCE COMPANY REFUSES YOUR CLAIM?
The short answer is that the courts are always available to work out such claims. If the insurance company denies your claim, the matter has to be brought directly against the at-fault driver. Once you file your complaint against the at-fault driver, that driver will notify his insurance company who will retain a lawyer to defend the claim. Once you file a lawsuit, the insurance company will revisit their initial denial and will usually seek to settle your claim. From my experience, these cases nearly always settle favorably for the driver whose claim was previously denied.
BE VERY CAREFUL WHEN TAKING ACTION WITHOUT ATTORNEY GUIDANCE
Make sure to consult your attorney about your diminution in value claim before you file a lawsuit against the at-fault driver because there is a law that requires you to bring a claim for ALL injuries and damages against the at-fault driver. Any claims that are not brought in that one action are potentially waived. Simply said, if you bring a claim for diminution in value and fail to include claims for the injuries you suffered in the accident, the court might now allow you to pursue an action for injury damages later. So, if you are suffering from physical injuries, you will need to work with your lawyer to coordinate the proper timing and inclusion of other required claims at the same time you consider bringing your diminution in value claim.
Although a diminution in value claim is easy to prove, going rogue and trying to accomplish this on your own in a small claims action without speaking with your attorney can be fatal to your personal injury case. Accordingly, be careful and make sure you involve your lawyer when you consider bringing a diminution in value claim against an at-fault driver in court.
At ANDERSON, HEMMAT & McQUINN, we believe that our clients should be fairly compensated when they suffer injuries and losses from an auto collision. If your car is damaged in a collision by a negligent driver, simply getting your car repaired does not equal fair compensation. You should also be compensated for the diminished value of your vehicle through a diminution in value claim. Many victims do not seek this type of claim only because they are unaware of their rights. If you have been in accident and you want to make sure that you are receiving all of the compensation that you are due, please call and speak with one of our attorneys today.