Many people don't anticipate having to deal with making a diminished value claim for their vehicle's loss in value after they are injured in a collision. Health always comes first and that's the way it should be. Still, once all the dust settles, many accident victims will tell you, diminished value becomes a concern.
Even if your vehicle gets repaired well, it's not always the same car. For example, sometimes repairs involve replacing original factory parts with older or substandard parts. Regardless of the kind of repair parts used, none of this takes into account how the car's resale value might be affected when the owner later goes to sell the vehicle and the buyer knows it has been involved in a serious collision.
If you are asking yourself any of the following; you've come to the right place.
- - What happens when I go to sell the car?
- - Won’t the car be worth less money?
- - Are people less likely to buy a used car that’s been in an accident?
- - What happens if the car isn’t the same after the repair?
What is Diminished Value?
The law may entitle you to be compensated for the damages to the car (known in lay terms as a property damage claim) in addition to the loss of value of the car. This loss of value is referred to as “diminished value.”
Q: How will I be able to get compensation in this situation? (When am I eligible to make the claim?)
You can typically only get compensation for this type of loss in Maryland if 1.) You are involved in an accident and 2.) You are the owner of the car involved and 3.) You are making a claim against the other at fault driver’s policy. It’s important to note that if you are making a claim for property damage under your own collision policy, you will not be able to claim diminished value in Maryland. Other states may have different rules in this respect. Our attorneys regularly handle diminished value claims in Maryland, Washington D.C. and Virginia. If you would like to discuss whether you are eligible to make a claim in one of these states, please feel free to contact us for a free consultation.
Q. Why do I need an attorney to handle a diminished value claim?
A. You don't necessarily. There is nothing to stop you from making this type of claim on your own without a lawyer. Just keep in mind, in today’s world where information is available instantaneously by internet or fax, if your accident has made its way into the 'Car-Fax' system, it will almost certainly have an effect on your ability to sell your vehicle if it has been involved in an accident before. Most people will check ‘Car-Fax’ or will want to know if the vehicle was involved in previous accidents and whether or not there was frame damage or other serious damage to the vehicle. I encourage clients who don't need or are unwilling to hire a lawyer to make these claims so they are not surprised later on when they go to sell the vehicle and have already settled their case.
Notwithstanding the above, an experienced attorney will work with you and fight the insurance companies on your behalf to get you maximum compensation for the lost value of your vehicle, and so it is sometimes a good idea to hire one. Especially if you have also been injured in the accident. Many lawyers will handle the diminished value claim in addition to your bodily injury claim at no extra charge to you!
Keep in mind that if you have a vehicle that is worth a lot of money or a newer car, the value of the car is more likely to decrease significantly after an accident, even if the car is repaired well!
Q. How is the compensation for the loss of value determined? How do I know how much less my vehicle is worth, now that it has been in an accident and repaired?
A. The most persuasive way to make these claims is to have an expert determination made. You can always try to make your case to the insurance carrier using Kelley Blue Book Values or other comparable asking prices for cars with accident histories, but you may not be able to pinpoint the actual value diminishment unless you have an expert take a look at the estimates.
Assuming you have a lawyer, once the repairs of your vehicle are complete and you are satisfied with the repairs, the attorney will hire an expert to assist you in determining the loss of value to the vehicle or “diminished value”. The expert can then determine what the value of the vehicle was before the accident and what the value of the vehicle is after the accident and the difference is calculated to be the diminished value. The expert will prepare a detailed report and your attorney will use that report and fight the insurance company to get them to compensate you for that loss. If you do not have a lawyer, consider hiring your own expert or relying on comparable
You may also be able to hire an expert on your own. As an attorney, my critical consideration here is making sure we hire someone who not only knows what they are talking about, but also someone who is qualified to testify in a court of law as an expert in case the insurance company refuses to pay and we are forced to file a lawsuit. Frequently, when we file a lawsuit for an injured client where property damage claims are unresolved or have been resolved unsatisfactorily resulting in a vehicle with loss of value, I will include a count in the complaint for diminished value and will subpoena an expert to trial to testify on their report. I have also seen some lawyers subpoena body shop or engine mechanics in as experts as well. I am not comfortable relying on these types of experts because some judges will permit their testimony on the issue and others will not. A qualified diminished value expert on the other hand, is less likely to be stricken as an expert on the issue.
Q. What can I do to assist the attorney and provide documentation to prove the diminished value claim?
A. If your car is in very good condition, and you have a way to prove that with mechanic records, receipts for parts, oil changes, any maintenance records and pictures then you need to provide these to your attorney. Also if you have a mechanic that worked on your car prior to the accident, then ask that person to write a letter regarding the condition of the vehicle prior the accident. You could also go to a dealership that will tell you how much your car is worth after the accident and have the put it in writing. You would have to tell them that the car was involved in the accident.
Q. What if my personal injury attorney won't handle my diminished value claim?
A. If you are already represented by a personal injury attorney and are concerned about your diminished value claim, we reccommend generally that you call your existing lawyer and ask them to handle this portion of your claim for you in addition to your injury claim. We regularly handle diminished value claims for all of our personal injury clients in addition to their injury claims. If your personal injury lawyer is not willing to handle both your injury and your personal injury claim together, you may want to consider switching to another lawyer who will.
Justin Katz is a partner in the Personal Injury Practice Group at Gordon, Feinblatt LLC. He regularly litigates diminished value and injury claims in the District Court of Maryland. He works with his father and mentor; Bob Katz who has represented injured victims in the Baltimore-Washington Area for over 35 years and is a member of the Million Dollar Advocates Forum. Justin or Bob can be reached at 1-888-540-2599.