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Diminished Value


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I was involved in a hit and run accident with my 2015 Denali and my insurance is filing this against my uninsured motorist coverage.

On top of the replacement cost of the truck there is a clause where they will pay me additional money for the diminished value of my truck due to the accident.

My question for the forum has anyone had any experience with this before?

How do you establish what the diminished value of the truck actually is without selling it?

How much with the actual value decrease because of the wreck?

 

The truck is virtually new, had 851 miles on it at the time of the accident. The other driver ran in to the right front corner of the truck, put me in to a spin running 65mph, hit the center median barrier wall with the left front corner, jumped over the wall (yes these trucks will climb right over that wall). I hope they total the truck but I'm still waiting to hear from insurance company.

 

On another note the airbags in these trucks apparently work pretty good because this was a serious wreck and I managed to walk away from it.

 

Any help on this would be appreciated.

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A few years ago I was rear-ended at high speed by another driver - they were found at fault and ticketed. I was driving a new BMW, which was repaired. I forced the issue of diminished value with the insurer and they ended up paying an additional sum. The insurer is not going to eagerly volunteer to do this in my opinion, so you may have to fight for it. As the previous author stated, I also think this only applies if your vehicle is repaired. If the vehicle is totaled, the amount the insurer covers is not subject to a diminished value claim. I was not seriously hurt in the accident, but did require some medical care and follow up. The at-fault driver's insurance company wanted to settle the medical issues with me quickly due to the potential liability. This is an area where legal advice might also be a good idea depending on the particular circumstances. Glad you are OK!

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Definitely try a search, I recall at least two threads last fall where guys got rear ended and DV came up. might help.

My High Country was rear-ended and repaired last summer.

 

I got a diminished value check from the other drivers insurance company. It was a pain in the ass, you really have to get after them. They'll do everything in their power not to pay out.

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The better prepared you are, the more likely you are to get some diminished value compensation. Try to get data/values showing the difference between a vehicle with no damage and one that shows up as having been repaired. With Carfax and other reporting systems, whenever you go to sell the repaired vehicle, a record will show that it was in an accident which raises red flags with potential buyers.

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I loved Chris' comment "I got a diminished value check from the other drivers insurance company. It was a pain in the ass, you really have to get after them. They'll do everything in their power not to pay out." Very true. One exception to what has been written, you do not actually have to repair your truck in order to make a diminished value claim. You can sell it as a wreck if you want. But what Chris wrote is just the way the game is played. Even with a great diminished value appraisal, insurers will try to delay and confuse you as much as possible, hoping you'll go away.

 

Now, to answer two of your questions, Anglerman.

 

How do you establish what the diminished value of the truck actually is without selling it?

 

My long-winded answer comes from one of our DV reports.

 

Our inherent diminished value reports are ultimately designed to be read and decided upon by a magistrate or mediator. In the past, our reports have proved conclusive in winning cases for our customers because they are based on real-world data. There are only five methods in which diminished value can be calculated.

  1. A letter from the claimant’s dealership declaring that the vehicle has lost value as a result of undergoing collision repairs. A typical insurance company response: A dealership is not a disinterested third party and has a financial interest in the acquisition price of a trade in vehicle. Their business model is to buy low and sell high. An offer of trade is simply the starting point of a negotiation and does not, in and of itself, establish any specific loss in value. It is our position that the documentation presented by you does not provide any underlying market data in support of the post-accident value of your vehicle.” One may concede that the use of a trade-in quote from the claimant’s dealer presents a valid argument that this is not an acceptable method.
  2. Figures made up out of thin air, usually buttressed by an appraiser's assertion that they are based on his or her years of experience in the field.
  3. By using formulas or algorithms such as Rule 17-C which assigns modifiers (points) to things such as whether frame/unibody damage or air bag deployment occurred or whether adjacent panels needed to be painted. These types of reports are subjective, simplistic and abstract. In our experience, judges who have attempted to decipher this type of appraisal understood them even less after having them explained by insurance company attorneys than when they first read them.
  4. The use of automobile auction results, while proving a better method that the formulaic approach, they have been deemed too generic by insurers. These results will show a number of similar vehicles that were sold at auction, some that were never damaged and others with bad Carfaxes. You can see that the bad Carfax vehicles sold for less but the auction printouts don't show the mileage, options, colors, etc. of each vehicle nor do they list the extent of the damages that were repaired. Insurers will argue that these results do not apply to your car and the circumstances of the case being heard - your vehicle and the damages that were repaired.
  5. A diminished value report that is prepared by The St. Lucie Appraisal Company takes into consideration all of the specifics of your car as well as the exact amount and nature of the damages that were repaired. It is as comprehensive a diminished value report as you can find. Our report does not contain any of our own opinions. Rather, it is the average of the opinions of six managers at recognized dealerships in your area. The last paragraph of our report addresses insurance company concerns regarding the use of dealer quotes. It reads: “All of the dealers queried were informed that the subject vehicle was not available for purchase or trade, therefore none of the dealers queried had any vested interest in the subject vehicle. This method represents unbiased, irrefutable proof of the evidence and amount of inherent diminished value.

How much with the actual value decrease because of the wreck?

 

You mentioned air bags so I'm guessing there was frame damage and that this was a disbling wreck whereby the truck had to be towed. These three things are all red flags for dealers come trade-in time. When they pull the Carfax and see these things on there, the offer for your trade-in drops dramatically. The Denali is a very desirable vehicle so even with a bad Carfax, a dealer is apt to give you a good price for your truck but not if it has had frame damage, etc. Then, the dealer can't certify it, banks may not finance it and it will go straight to auction. Once there, all of the Carfax info is disclosed and the dealer keeps his fingers crossed that he doesn't get killed on the sale. This is why he can't offer much for a frame-damaged vehicle.

 

I showed you the various methods that independent appraisers use for determining diminished value. I do it by calling dealers until I obtain six unbiased quotes. Other methods may result in lower loss of value results but I can't say that for sure. So - frame damage, air bags, towing....even though a dealer might be eager to take a Denali in on a trade, his offer for yours could be as much as 50% less than fair market value. If you walk away, it costs him the profit from a new truck sale but better than losing more than what he'd get back when he loses money on your truck at auction.

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The fact that your personal value (well-being) was not diminished is the good part of all this (no serious injuries).

 

Hope they treat you fair in settling your claim. Might not hurt to consult with a reputable lawyer if one can be found who is willing to give you advice without formal representation in the claim.

 

As we all know, the truck can be replaced one way or another. You can't.

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