While a vehicle may be "totaled"-- damaged to the extent that the salvage value and repair costs exceed the current fair market value -- many times a vehicle can be repaired to like-new condition. Unfortunately for the owner, a vehicle that has been involved in a serious accident is not worth as much as the same vehicle with a clean title history. The difference between what a car would sell for after an accident and what it would have sold for before is called "diminished value."
Establish the pre-accident value of the vehicle for which you are seeking damages for diminished value. The "Kelley Blue Book" and "National Auto Dealer's Association Guide" are both resources commonly used to establish the value of a used car. Input your vehicle's make, model, year, mileage and options. The private party value -- what you could have sold it for in its pre-accident condition -- is the correct measure of fair market value and will provide the starting point for your diminished value claim.
Establish the post-accident value of the vehicle. While online resources exist for trying to calculate what a repaired vehicle is worth after a wreck and you can submit such a calculation to the insurance adjuster, most websites won't be able to send an expert witness to testify in court if you can't reach a settlement. Find an experienced used car appraiser or dealer to evaluate the vehicle's post-accident value. Have the same appraiser or dealer render an opinion on what the vehicle would have been worth before the accident.
Draft and send a settlement package to the insurance adjuster representing the tortfeasor's insurance company. Include all online calculations and opinion letters from the used car appraiser or dealer you consulted to establish the repaired vehicle's value. Request compensation for your diminished value damages.
Proceed to court in the event the adjuster refuses to pay your claim. While many diminished value claims fall within the purview of small claims court, check your state's jurisdicitional statute to determine if your case belongs in a higher court. In court, you will bear the burden of proof on all essential elements of your claim. This includes not only the car's pre- and post-accident values but also proof of negligence on the part of the insured defendant and causation between the defendant's negligence and the damage done to the car in the accident.
Examine any check or release you sign in getting your vehicle repaired or processing your bodily injury claim. Many insurance companies issue blanket releases along with checks for vehicle repair and bodily injury. Although many adjusters behave in a highly ethical manner, many others don't. Additionally, adjusters make mistakes. If you sign a blanket release in return for a personal injury settlement or an overly broad property damage release to get your car fixed sooner, you may be waiving your diminished value claim as well.
- Insure.com: Diminished Value Claims Get the Wrecking Ball: Harry Hitzeman.
- Lawyers.com: Auto Accident: Determining Value and Diminished Value.
- Property Casualty 360: Online Service Helps Establish Diminished Value: Marguerite Swallow.
- Advocate Auto Consultants: Diminished Value Claim.
- NADA Guides: New and Used Car Pricing.
- Kelley Blue Book: Used Cars.