If someone hits and damages your car, their insurance carrier may not offer to make you whole for your loss. The rise of CARFAX and other such services means that any car in an accident could have a lower resale value just because it shows up on a CARFAX or other vehicle history report — even if it has been fully repaired. That loss is real and measurable, but many carriers don’t want to pay you for it.
Repairs May Not Be Enough
The insurer for the person who damaged your car may or may not readily agree to pay for your repairs. But even if they do reimburse you for that work or pay the body shop directly, that might not cover your entire loss. Many people now find that when they go to sell or trade their repaired car, purchasers offer them less, specifically based on the car’s public accident history.
- There might be at least two reasons for this:
- The mere fact it was hit can worry prospective buyers about hidden damage or lingering problems; and
- Some cars – such as cars with bent frames– can never be fully repaired, and anyone skilled in car repair can tell if a car was on a frame-straightener.
Diminished Value Should Be Recoverable
Whoever hit your car should be liable for all measurable, consequential loss, if they were negligent. That consequential loss should include the decrease in potential resale value of your car. Moreover, barring some other problem, all measurable injuries to your property should be covered by the negligent driver’s insurance company.
Carefully Consider The Practical Obstacles To Pursuing Diminished Value Claims
You should absolutely ask for the reduction in resale value from the carrier for any negligent driver that repairs your car. They may not give it to you. In fact, they may misleadingly claim such damages do not exist, or are not recognized, or are outside coverage.
If that happens, you should think about pursuing your diminished value claim, but keep the practical situation in mind.
For example, if your fifteen-year-old Ford Escort is damaged in a fender-bender and requires repairs, the costs might not warrant a lawsuit for diminished value. Assuming a $2,000 normal resale value and a 20% decrease in resale value because the car now shows up on CARFAX, its value has gone down $400. Few lawyers will take a case with damages that low, as the recovery cannot generate a reasonable fee for the work involved. It might not even make sense to sue on your own because you will need an expert appraisal to prove your damages in court. And that could cost $400, or maybe even more.
When, on the other hand, your brand new Porsche Cayenne SUV is hit and must be put on a frame-straightener as part of the repairs, you probably should pursue its diminished value. That car might be worth $90,000, and the lingering frame damage might decrease resale value by as much as 40% or more. That could leave a diminished value claim approaching $40,000. With that much at stake, hiring an expert to appraise its lost value could be a worthy investment. And you might have an easier time finding an attorney who would take it on an hourly or contingent basis.
Conclusion
If your car is hit by a negligent driver and repaired, ask the carrier for its decrease in resale value. If the insurer balks, consider filing a suit if the numbers justify it.
Download a PDF of the article here.
John J. Rasmussen founded the Insurance Recovery Law Group, PLC after nearly a decade of working for insurance companies. You can learn more about him and his practice at www.insurance-recovery.com. You can contact him at jjr@insurance-recovery.com.