How to Recover Depreciation on Auto Insurance Claims
How to Recover Depreciation on Auto Insurance Claims
- The Fee Is Free Unless You Win®.
- America's Largest Injury Law Firm™
- Protecting Families Since 1988
- 20 Billion+ Won
- 1,000+ Lawyers Nationwide
Free Case Evaluation
The attorneys featured above are licensed in Florida. For a full list of attorneys in your state please visit our attorney page.
How to Recover Depreciation on Auto Insurance Claims
It can be frustrating to navigate the process of filing a car insurance claim, but you need to be prepared to understand some of the most common pitfalls. One major issue that impacts many people who have legitimate car insurance claims is trying to figure out how to recover depreciation on auto insurance claims. Most people are aware that their car depreciates in value as soon as it is driven off the lot and also over a period of time. This can often come into contention with the insurance company when you need to file a legal claim for your situation.
One of the most challenging aspects of recovering a depreciation claim has to do with how the insurance company typically approaches this process. You might find that you and the insurance carrier are on different pages about the perception of your injuries.
What Is Recoverable Depreciation?
Depreciation might also be referred to as a diminished value claim. You may be able to use this to recoup some losses after a car accident if your car is well beyond dents and scrapes. If your car has had repairs made to it but is much less valuable as a result of this experience going through the insurance process, you have a right to attempt to get compensation for this loss.
You would do this by opening a diminished value claim and this is your first step in how to recover depreciation on auto insurance claims. Diminished value claims help address the difference between your car's worth before the accident and after the accident. When you are involved in an accident caused by another person's negligence you would open a car insurance claim against that driver's policy. If you believe that the accident itself pushed down the car's value in the market, then you would also need to pursue a diminished value claim with their insurance company too. There are three primary kinds of diminished value claims.
Immediate Diminished Value
An immediate diminished value claim refers to those situations where the resale amount is calculated immediately after your vehicle has been involved in an accident but before it gets repaired. Since you are most likely going to get the damage repaired on your vehicle, this kind of claim is rarely used but is still an option.
Repair Related Diminished Value
If your mechanic provides insufficient or improper repairs on your car or uses low-quality parts to make the repairs, you could initiate a claim for repair-related diminished value. The diminished value amount assumes that the vehicle cannot be brought back to its initial condition. One common way that this comes up is when you own a luxury car, you will need to be very careful that the mechanic uses exact parts from the maker of that car to replace damages. Otherwise using generic parts can significantly diminish the value of your vehicle.
Inherent Diminished Value
This claim refers to the car's market value after it has been repaired following an accident. Even if the mechanic has done an excellent job making these repairs, it is unlikely that your car will be good as new because the presence of an accident in its history makes the car's worth lower for potential buyers. This is the most common kind of diminished value claim out there and has prominent implications today because many people run reports to learn as much as possible about the accident history of a vehicle.
How it works
It's easy to get started.
The Fee Is Free™. Only pay if we win.
Results may vary depending on your particular facts and legal circumstances.
Step 1
Submit
your claimWith a free case evaluation, submitting your case is easy with Morgan & Morgan.
Step 2
We take
actionOur dedicated team gets to work investigating your claim.
Step 3
We fight
for youIf we take on the case, our team fights to get you the results you deserve.
Client success
stories that inspire and drive change
Explore over 55,000 5-star reviews and 800 client testimonials to discover why people trust Morgan & Morgan.
Results may vary depending on your particular facts and legal circumstances.
FAQ
Get answers to commonly asked questions about our legal services and learn how we may assist you with your case.
When Should I File a Depreciation or a Diminished Value Claim?
Filing a diminished value claim is not the right approach for everyone. There are many different factors you'll want to consider in determining if this is the right approach for you. First of all, think about your vehicle's value prior to the accident. If you had a lot of structural damage previously or a high amount of mileage prior to the wreck, it doesn't work to file a diminished value claim because you may not receive much in return. Every state also has its own laws about diminished value claims and how they are calculated. It's a good idea to speak with your personal injury lawyer to better understand how this could influence your specific case.
Two other important factors to consider when filing a depreciation or a diminished value claim are whether the other driver was insured and who was at fault. If the other driver did not have car insurance, you will need to review your own vehicle policy to determine if you had uninsured motorist coverage. In this situation, you would need to file a diminished value claim through your own insurance company, but you may also have grounds for a personal injury civil lawsuit against the responsible party. Insurance companies will not process diminished value claims if you were at fault for the damage, so you are not eligible to do it if you cause the accident yourself.
How Is Depreciation Calculated?
Depreciation or diminished value claims are typically calculated using the 17(c) diminished value formula to identify the new value of a vehicle after an accident. The first step is to determine the value of the car using a tool such as Kelly blue book or the NADA. You can use information about your vehicle before the accident and put it into their online calculators to get a basic idea of the value of the vehicle. The next step is to then apply a 10% cap to that value. This caps the maximum amount that your insurance company or the other party's insurance company will pay on the claim.
The next step is to apply a damage multiplier, which is multiplied by the 10% cap value. The damage multiplier is from 0.00 to 1.0 depending on the severity of the structural damage done to your vehicle in an accident. 0.00, for example, would refer to no significant structural damage or replaced panels but a 1.00 multiplier refers to severe structural damage. At that point you will then take that number and apply a mileage multiplier. This depends on the levels of mileage on the vehicle prior to the accident that would be 0.00 for 100,000+ miles but a multiplier of 1 for between 0 and 19,999 miles.
You might also wish to run these numbers prior to filing a diminished value claim so that you have a better idea of what to expect and whether it is worth your time to continue in this way. Depreciation can be very frustrating for someone who has been hurt in a serious accident and will not be able to recoup the value of their vehicle in any other way. It is strongly recommended that you consult with a personal injury lawyer who has extensive experience in this area of the law to increase your chances of full and fair recovery of compensation.
Should I Try to Sell My Car After an Accident?
There are plenty of reasons why you might try to sell your vehicle after it has been an accident. Perhaps you kept this vehicle in excellent condition and now are frustrated that even with repairs you have to drive a vehicle that was involved in an accident. It is also possible that the vehicle reminds you of the accident on a regular basis, where you no longer feel safe behind the wheel because the vehicle has already absorbed substantial impact in a crash. You might simply want to put the chapter of your life behind you and move forward with a new vehicle. Bear in mind, however, that attempting to sell a vehicle that has been through a vehicle accident can be problematic. This is mostly because other people's perception of the safety of the vehicle is an issue for getting full value. This is true even when you have made substantial repairs and included direct manufacturer parts in that repair process.
What if I Can’t Sell My Car?
A leading reason to seek out depreciation benefits for your car insurance company is that you might be concerned that you will be unable to sell the car at all. This is a big problem for anyone who does not want to drive the vehicle anymore but is unable to sell it for fair market value. Because of other people's beliefs about the damage caused to the vehicle by an accident, you might not be able to sell this vehicle at all. In this situation, you may be able to loan it to a family member or friend who is unable to afford a new car or donate it to an organization.
If you are currently attempting to work with your insurance company to get maximum depreciation and benefits following a car accident claim, you might need a lawyer in your corner who can help you handle this communication. Hiring an attorney can help you increase your chances of recovering the maximum compensation and verifying that the insurance company follows through on its legal obligations to you. For more information, contact our car depreciation claim experts at Morgan & Morgan today for a free, no-obligation case evaluation to get started.
More Like This
types we may be able to assist with, visit our Practice Areas page.
