A car accident that causes property damage will reduce the overall value of your motor vehicle. Even if you repair your vehicle to its previous state, having a crash history can diminish its market value. In Arizona, a crash survivor may have the right to bring a diminished value claim seeking financial compensation for the lesser value of his or her vehicle following a car accident. A diminished value claim seeks reimbursement for the lost resale value of a damaged car.
Who Is Liable for Diminished Value?
Before you can seek compensation for the diminished resale value of your vehicle, you must understand who is liable for your damages. This will depend on the fault laws in your state. Arizona is a traditional fault-based state, making the driver that caused your car accident legally responsible for related losses. This could be the other driver involved in your car crash or a third party, such as a vehicle manufacturer or roadway maintenance team.
Once you identify the defendant, file a claim with that person’s insurance provider. You have the power to seek compensation for the full spectrum of damages you suffered due to the vehicle collision. This can include all medical expenses, property damages, lost income, and pain and suffering. The insurance company should reimburse your expenses up to the policy’s maximum. Unfortunately, most auto insurance companies will not voluntarily offer compensation for diminished value. Instead, you will need to prod the insurance provider to offer this service.
What Is Diminished Value?
Bring your vehicle to a mechanic immediately after a car accident in Arizona. The at-fault party’s insurance company may require you to choose a mechanic on its approved list. Ask whether this is the case when you file your claim to damages. The mechanic will give you an estimate of how much money it will cost to repair your vehicle. The insurance company will receive this estimate and use it to offer a fair and reasonable settlement amount. If repairs will cost more than the overall value of your car, the mechanic will classify it as a total loss. In this case, the insurance company will give you enough for the pre-crash market value of your vehicle.
Diminished value does not refer to the cost of vehicle repair or replacement after a car accident. It refers to the resale value of your vehicle now versus its resale value before the collision, if they are different. Arizona is a diminished value state, meaning the insurance company taking your claim might have to pay for the diminished resale value of your vehicle. Since you will have to list “Previous Accidents” on sites such as Kelley Blue Book, this could reduce the monetary value of the vehicle. Calculate what your vehicle is worth now, after the accident, and subtract it from its market value pre-crash. This is the diminished value of your vehicle.
How to Bring a Diminished Value Claim
Diminished value can arise from lower-quality replacement parts (after-market vs. original equipment manufacturer parts), structural compromises, undiscovered or irreparable vehicle damages, a voided factory warranty, or buyers being less willing to purchase a vehicle that has been in an accident. Once you calculate the diminished value of your vehicle, file a claim for this amount of compensation from the at-fault party’s insurance company. You will not be eligible to recover compensation for diminished value if you caused the collision in Arizona.
The at-fault driver’s insurance company can handle your diminished value claim as part of your overall personal injury lawsuit or as a separate property-damage only claim. In general, you will have two years from your auto accident to bring your claim. Issue a demand letter against the insurer with the amount required to make your damages whole – including diminished vehicle value. Do not sign a property damage release form from the insurance company after a mechanic makes repairs. This could destroy your chances of seeking further compensation. Instead, contact an attorney for assistance moving forward with the claims process. A car accident lawyer in Phoenix can help with the process to help maximize compensation.