Sloan Curtis Automotive Group has been helping people with Diminished Value claims since 2012.
You can count on us to use our knowledge of the auto industry and Insurance companies to help you get the Diminished Value owed to you.
“Inherent Diminished Value” in motor vehicles is based upon a widespread belief whereas: “Once damaged, it will never be the same again”. This stigma is attributed to the common instances over time whereas “inherent” appearance and operational deficiencies often times remain, even after proper and thorough repairs have been performed. The old saying, “Perception Becomes Reality” never rang so true as it does in the straight-forward, yet oftentimes misunderstood and controversial issue of Diminished Value.
Additionally, inherent diminution of value occurs at the precise time of the loss and sustaining the resultant damages. The true measure of a damaged vehicle’s inherent loss in value can be measured as the difference in the value of the property before the loss to that after the loss, prior to or after repair.
Repair activities (i.e. repair, replacement of parts, refinishing etc.) merely aid in the recovery of a vehicle’s appearance, function and value, relative to the quality and thoroughness of the performed repair.
Inherent loss or diminution in value is real and continues to exist simply because, for the most part, no reasonable and prudent buyer is willing to pay the same price for a vehicle with a history of damages as they would for one never having been damaged. Many offer discounts for scratches and dents on appliances, electronics and dented cans of beans, why then would the value of a once damaged motor vehicle not be negatively affected?
“Inherent Diminished Value” is based on public awareness that even if a damaged vehicle is repaired to the best of human ability, it will still exhibit remaining deficiencies and inconsistencies from the pre-loss condition of the vehicle.
These deficiencies include, but are not limited to:
· Weaker structural components that appear cosmetically sound
· Impossible to duplicate factory seams, sealers, and finishes
· Telltale signs of repair, such as paint missing off the heads of bolts etc.
· The unavailability of some factory decals, and markings (e.g. VIN labels)
· Undiscovered kinetic damage throughout the vehicle
· The increased likelihood of a mechanical failure due to direct and/or kinetic damage
· The effect that the repair will have on the future deployment of the SRS (air-bag) systems
· The unfeasibility of duplicating immersion and/or robotic applied rust-proofing techniques
· The loss of factory warrantees and eligibility of Certified Pre-Owned (CPO) vehicle warranty programs
“Insurance Related Diminished Value” is based upon and resultant from remaining flaws, defects, and damage, which, through their involvement, the insurer had failed or neglected to fully and/or properly address.
Several examples of Insurance Related Diminished Value causing issues are as follows:
· The call and employment of inferior replacement parts
· Mismatched paint finish (e.g. whereas no consideration for paint matching activities were provided for)
· Remaining repair related residue, dirt, etc.
· The lack of replacement decals, labels and markings (i.e. belt routing)
· Overlooked or disregarded kinetic damage throughout the vehicle
· Overlooked or disregarded mechanical damages.
· Overlooked or disregarded safety issues (i.e. inspection-testing of belts, SRS systems etc.
· No allowance for application of factory sealers, sound deadening, rust proofing etc.
When an insurer negotiates the settlement of an automobile damage claim they will typically provide an estimate of repair which outlines the specific procedures, parts, and materials of which they are willing to provide for to the claimant or insured. One of the following entities will generate this itemized listing of insurer-authorized repairs:
· An “in-house” appraiser, who is hired as a full time employee of the insurer, then trained to assess collision damage in accordance with the company’s policies and procedures.
· An “independent” appraiser who is hired as a subcontractor to assess the damage on behalf of the insurer and does so based upon the insurer’s mandates and/or guidelines.
· An employee of a “Direct Repair Program” (a.k.a. DRP) body shop, who agrees to prepare the repair estimates using the guidelines (parts, labor/material rates etc.) established by the insurer in exchange for the insurer’s direct referral of customers.
In some instances, the insurer will offer to pay based on the lowest of three estimates.
This may cause the level of compensation to be based upon the estimator with the least experience, inspecting the vehicle for the shortest period of time, using the poorest repair techniques, and/or overlooking the most damage. Additionally, there are those less scrupulous repairers who may intentionally underbid the repair to “seize the keys” only to submit a supplement for additional costs during the actual performance of repairs.
Auto Damage Experts’ appraisers are trained and experienced in providing accurate and comprehensive damage and repair assessments, providing for the necessary and recommended processes and procedures.
The employment of parts and materials, as needed to restore a damaged vehicle to its pre-loss condition in safety, function, appearance, and value to the best of human ability, has proven time and again to reduce claims for Diminished Value and other associated liabilities including, among others, costly re-repairs and avoidable ‘loss of use’. Let us handle your proper damage assessment.
“Repair Related Diminished Value” is based primarily upon remaining flaws and defects resulting from improper and/or insufficient repairs for which the repairer had agreed and provided consideration to complete in a workmanlike manner. Poorly performed repairs would cause the vehicle to be valued less than if it had been properly and thoroughly repaired.
A few examples of such repair related flaws and defects are as follows:
· Poor structural, and/or cosmetic welds
· Frame/structural repair listed on the insurance estimate, but not completed properly and/or thoroughly
· Telltale signs of repair, wavy body work, sand scratches, paint overspray etc.
· Damage and/or removal of irreplaceable factory decals, and markings
· Undiscovered, overlooked or disregarded kinetic damage
· Undiscovered, overlooked or disregarded mechanical/electrical damages.
· Undiscovered, overlooked or disregarded damages/testing SRS systems.
· The failure of duplicating factory appearing sealers, sound deadening, rust proofing etc.
· Remaining flaws (paint-runs) and defects (dirt, etc.) in applied finishes
· Mismatched color after “tinting” and “blending” processes were provided for
· Sanding scratches on moldings, glass, and trim
Many average consumers are perfectly capable of finding such remaining damage and/or repair related flaws and defects, as well as residual indicators as may be found in a high-quality repair. In many instances, only the trained eye of professionals, experienced in the repair, purchase and/or sale of motor vehicles may find such remaining flaws and defects.
Frequently Asked Questions
We work on a contingency basis, meaning if we don’t secure a settlement on your behalf, you owe nothing. If we do secure a settlement, our fee is 50% percent. Our fee is inclusive of all expenses it takes to settle your case.
Loss of Value or Diminished Value is the difference in the market value of a vehicle without an accident history and the market value of the same vehicle with accident history. Unlike depreciation, which is an anticipated and predictable loss in value incurred over time, Diminished Value is an unexpected and sudden loss in value due to a specific occurrence. This loss may be recovered as part of a property damage claim.
This would depend greatly upon the nature and severity of the damages sustained and the manner and quality of the repair performed as well as the vehicle itself and history of prior damages etc. Minor damages such as merely a damaged tail light or chrome bumper may be properly replaced with factory replacement parts whereas little if, any evidence of repair would be found even by the most experienced professional.
A vehicle which has sustained major damages, even after receiving the best possible repair, will not only have a history of being damaged but most often will have remaining signs of repair which will be easily noticed by a professional (i.e. car dealer at trade in, post repair inspector, potential buyer etc.). Such remaining indicators will cause a loss in value and may pose remaining safety related flaws and defects as well.
Under most state laws, every auto dealer is to disclose an accident history on a vehicle to a potential buyer. To be in compliance, and avoid lawsuits, they are often careful to ask regarding the damage history from the prior owner and may even have the owner sign an affidavit. After disclosure, most buyers are not willing to pay the same amount for a vehicle with an accident history as they would for the same vehicle without an accident history.
The loss in value of a damaged vehicle is known as Diminished Value. The amount of Diminished Valueof a damaged and repaired vehicle depends upon several factors including: the pre-loss value of the vehicle, the nature and severity of the damages and the cost, manner and thoroughness of the performed repairs.
Consider that, when a vehicle is in an accident, it loses its greatest value just after the actual impact or occurrence. During the dismantling, repair, installation and painting of replacement parts, the value is slowly restored as the repairs progress.
The full original value will likely never be regained simply because the vehicle now has a history of damage that it did not have before the loss. Prior damage history will be disclosed to potential buyers who will likely not pay the same for a vehicle with a damage history as compared to one with no damage history. This is often referred to as “the damaged goods syndrome”.
If the repairs are done thoroughly and in a workmanlike manner, the value of the vehicle can be maximized to the best of reasonable human ability but likely never to its pre-loss value.
If the repairs are done to less than thorough and workmanlike standards, the recovery in value will be limited accordingly, and the vehicle will suffer a greater loss or diminishment in value.
The more significant the damages, the greater the loss in value. The poorer the repair quality, the less recovery of the vehicle’s original and pre-loss value. In order to make this determination you should secure the services of an independent professional to perform a visual inspection of the vehicle and prepare an expert assessment of your remaining loss.
As a result of damages sustained in a covered loss and a claim made against an insurer, the insurer is obligated to provide for either the repair or replacement of the damaged property. Normally the insurer is given the authority to make the decision to either repair or replace the damaged property. Once they make the decision they are held to a level of “pre-loss” condition and/or “actual cash value” (ACV).
Should the insurer elect to repair a damaged vehicle, they owe the costs to restore the damaged vehicle to its pre-loss condition to the best of reasonable, human ability.
Should the insurer elect to deem the damaged vehicle to be a total-loss, they are obligated to provide replacement or actual cash value enabling the claimant to purchase another vehicle equal to the value of the damaged vehicle, immediately prior to the loss. The rules of indemnification are clear in as much as what is owed is what was possessed just prior to the loss, no better and no worse.
Additionally, you may be entitled to sales tax, tag and title transfer costs in the event your vehicle is determined to be a total loss. You may be entitled to ‘loss of use’ (temporary substitute vehicle) during the time required to make repair; or, seek a replacement vehicle from the at-fault party, their insurer, or as may be provided by coverage within your personal insurance policy.
The key to recovering all losses owed is to know just what it is that is owed you. Having an in depth visual inspection of the damaged/repaired vehicle and accurate assessment of your remaining damages prepared for you and understanding the necessary steps in the recovery process in paramount. Providing a detailed report with your claim will enable the insurer a clear understanding of your remaining loss and facilitate a more timely settlement.
Your ability to recover Diminished Value may depend on who was at fault, depending on various factors. There are two entirely different grounds for recovering the loss in value which apply depending on your status as either a first party or a third-party claimant. First parties are usually seeking recovery of their damages from their own insurance company, whether the insurer pays for Diminished Value depends upon the terms of the insurance policy and the state’s interpretation of that policy and perhaps the insurer’s activities during the claim process. Third parties usually seek damages from the at-fault driver and/or their insurer for the loss in value as part of the property damages caused by the negligent driver. Most states allow for such recovery against the negligent party under what is known as ‘Reinstatement of Torts’.
The term “No-Fault” generally refers to claims for injury and not necessarily property damage issues. In most states the “Reinstatement of Torts” is the rule followed whereas the at-fault party is responsible for all financial damages caused to another resulting from their negligence which may include Diminished Value.