Diminished Value in a Car Accident Claim

Having full-coverage insurance is one way to protect your car if you cause an accident, and your policy may cover the reimbursement for something called diminished value. If you are ever in a situation where your car experiences a lot of damage, you may want to consider asking for compensation for diminished value.

The definition of diminished value

Diminished value is a term you will hear after a car is damaged from an auto accident or something else. This term describes the loss of value a car experiences simply from being damaged. A damaged car is worth less than a car that is not damaged, and this is even true if the damaged car is fixed. A car that was severely damaged and then repaired will never be worth as much money as the same car would be had it never been damaged.

Why diminished value exists

Diminished value is something that you can request after an accident to compensate you for the loss of damage you will always have with this car, simply because it was damaged in an accident. One of the reasons diminished value exists is the view people have of wrecked cars. People who are car shopping are often hesitant to purchase a car that was damaged in an accident, and they will want to pay less for a car like this. The reason for this is that cars that were damaged may still have issues, even if everything was fixed. There is still a greater chance that a wrecked car that was fixed will have some problems from the accident that no one noticed afterward.

How to get compensation for this

If you would like to receive compensation for diminished value after an accident, you should begin by talking to the insurance company that is paying the claim. If you caused the accident, this would be your own insurance company. If someone else caused it, then you should talk to that person's insurance company. Additionally, you could consider hiring an appraiser that specializes in diminished value to have evidence that your car is now worth less than what it would have been worth had the accident not happened.

When you experience a car accident and begin settling the claim, you should talk to the insurance adjuster about diminished value. If you have questions about this or car insurance coverage, contact a car insurance agency today.