QuestionThis is not a personal injury question, but you are the only
expert listed for auto insurance. I hope you can help...I have a
question about what I need (or don't need) to file a claim of
Diminished Value. My 2003 Ford Explorer incurred $12,000
worth of damage (w/extensive frame damage) when it was hit
while parked on the street (it was rear-ended and then pushed
into another car!) The other party's insurance company- USAA -
has accepted liability and has paid for the repairs and my rental
car expenses. I feel I am fairly owed money for DV. USAA did
not dismiss it when I brought it up, just said they had a separate
dept to handle it. Do I have to show actual proof (and if so,
how do I obtain it), or should I just have a conversation with that
dept and see how they respond? (Accident was in CA. But,
USAA is based in Texas.) I always believe that the squeaky
wheel gets the oil.. and I know that this car will now be virtually
impossible to sell.
Thanks so much.
AnswerDear Vicki,
Sorry to hear your "baby" had such a big trauma and injuries. I hope that the repairs did not leave your vehicle in a lesser condition safety-wise than before the accident.
USAA has had mixed results in diminished value lawsuits. But in a third party action, such as this would be, the courts have been more lenient in allowing a diminished value claim so long as it is supported by solid evidence, not mere speculation.
I am going to devote a lot more time to your question than I normally would, largely because I feel our website at www.settlementcentral.com needs updating on this topic. Here is my webpage showing free information and instructions following an auto accident:
http://www.settlementcentral.com/page0007.htm
We need to expand our coverage and content regarding diminished value inasmuch as the site now speaks mostly to expensive cars, but I am aware that in third party claims many states are allowing diminished value claims in limited circumstances for vehicles of more ordinary worth, such as your Ford Explorer. Thus, we need to encourage people to make diminished value claims when there is a significant amount of damage, as in your case.
Here are the factors that favor a diminished value claim in your case. When any of these are present, please be sure to mention them to USAA. Argue the points as made below.
1. Diminished value claims will have a better chance of success in third party claims inasmuch as you are not bound by what USAA may have in its policy with regard to dealing with its own insureds on this topic. Thus, don't let them quote you from what is in their policy, or even in your policy for that matter. The tortfeasor has to make his victim whole, irrespective of what the insurance companies may have in their policies.
2. Diminished value payments may be warranted where, as here, there is significant damage. There are three risks associated with the repair of this damage, and you may deserve compensation for these risks, BUT ONLY ON CONDITION THAT YOU CAN PROVE THEM. But even if you do not spend the money to develop the evidence, it still is OK to allege these risks in a demand letter, even if you cannot prove them. Let USAA figure out whether or not it wishes to pay or take the risk that you could prove them.
3. First, there is the inherent risk of diminished value whenever we have a big trauma and repair. It is very likely the case that you will have to reveal the facts of this accident to any prospective purchaser of your vehicle. Call a couple of dealerships and ask if you were trading in a 2003 Explorer would they require you to complete a disclosure statement. If so, be sure to mention that fact to USAA. Even if you never would have to disclose this damage in your own state, there could be a record of serious repairs that was filed and will surely be picked up by outfits like www.carfax.com, which is used to check out serious damage repairs for prospective buyers. Thus, it is even more certain that a buyer will have knowledge of the fact your SUV was in a serious accident. If the expected market value of your vehicle before the accident was $23,000 and a buyer had a choice of two twin vehicles, one of which had $12,000 worth of good competent repairs done to it, which one would be sold first? Or, conversely, what would the marked penalize your vehicle for having been in that serious accident? NOTE: this will be the weakest link of your argument and the one more easily opposed by insurance companies. It is perhaps a bit more speculative than the other two below.
4. Second, it makes a difference what was damaged: fluff or structure. What if the repairs were just sheet metal and trim and paint, as opposed to important structural members that were damaged? Have someone who knows autobody repairs review your repair order and invoice and tell you whether or not any important parts of your car were damaged. If so, the existence of structural damage would reduce the value of the SUV, even if it were done competently. Ask the dealer for his estimate of price reduction.
5. Third, what if the repairs were not done to pre-accident standards? This would take an examination by someone knowledgeable, but it might be a good investment. They can spot things you and I would miss, such as paint being where it should not be, panel spacing not being even on trunk, hood, doors, etc, welds not being proper, or important parts being replaced with inferior after-market foreign-made parts.
6. A final reason to make a diminished value claim is to get in writing the opinion of the insurance adjuster that the repairs did not reduce the value of your vehicle or that the reduction was only of a certain amount. That could insulate you to some degree if you were to omit telling a prospective buyer about the repairs. In other words, since an expert in the field opined that the repairs completely restored your vehicle to pre-accident condition, why is it necessary to disclose the fact of the accident, unless specifically required to do so by your state law?
Here is what you need to do ASAP:
7. Read the articles referenced here regarding getting full value for damage to your vehicle;
8. Check with your state insurance commissioner for your rights to diminished value. Make SURE YOU DO NOT TELL THE INSURANCE ADJUSTER that you are going to contact the insurance commissioner (in case your answer is not favorable to your claim). Then, if the answer is favorable to your claim, you can recite it in your demand letter to the insurance adjuster. If it is not favorable, then do not be dissuaded from making your diminished value claim. Just go ahead with no mention of your insurance commissioner contact. Here is how to contact state insurance commissioners: http://www.settlementcentral.com/links.php
9. Contact someone who is qualified to make a thorough inspection of your vehicle; look at these links for starters to see if anyone is in your area. If not, don't hire them to come to your area, call around locally to find a quality independent autobody shop and have them do it. Here are the links to various national diminished value assistance businesses. Don't be afraid to spend a couple of hundred dollars: these guys can make you a couple of thousand dollars, or more. Check out a few of these before you decide. Some are just computer printouts done from afar, which MAY be OK for you, whereas others may have contractor inspectors near your area. http://www.ican2000.com/help/dvpros/index.html; http://www.collisionclaims.com/autocollisionconsulting.html; http://www.claimcoach.com/servicesframe.htm?services.htm~bottomright; http://www.usaautoappraisers.com/diminishedvalue.htm; http://www.autoappraisal.com/value.htm; http://www.appraisalgroupofamerica.com/replacement.htm; http://www.americancoachworks.com/choosing_a_shop.html; http://www.tommys-autobody-repair.com/consumer-advocate.htm; http://wreckcheckcarscan.gemspot.com/cgi-bin/wreckcheckcar/services.html; http://www.collisionconsulting.com/collectingdv.html;
10. Ascertain the quality of repairs, whether or not they left anything in less than pre-accident condition, and whether or not the repairs were made to any structural or important parts of your vehicle.
11. Contact a couple of dealers who sell pre-owned vehicles and get them to give an opinion about the difference in value under the various scenarios discussed above. Be sure to give them your name and get their name and contact information inasmuch as this is going to be the evidence in support of your proof of damages.
12. Write A DEMAND LETTER—DO NOT PRESNET THIS CLAIM OVER THE PHONE. A mere phone request will not be given as much weight as a letter in which you present the arguments I have given you above.
13. Finally, consider using any uncompensated diminished value loss as a deduction on your income tax return. You will want to first obtain a GOOD SOLID WRITTEN OPINION of your loss, and then clear the deduction with your income tax preparer. If you itemize, you could get a pretty good chunk of change in savings. For example, let's say that your expert says you suffered $6,000 in diminished value, and USAA pays $2,000, leaving you with a provable loss of $4,000. Ask your tax preparer why you cannot deduct that on your 1040, using IRS Form # 4684, which deals with causalities.
That is it for diminished value, and now on to a new topic.
BE ALERT FOR SIGNS OF PERSONAL INJURY
I know that you introduced this as not being a personal injury claim, but with that big of a hit, there is a probability that your body did suffer trauma sufficient to cause soft tissue injuries. These types of injuries can sometimes start out as nothing, but within a week or so one might start to notice aches and pains. Pay attention, as this is the first sign of delayed onset of soft tissue injury pain.
So you should be on the lookout for signs of injury that may manifest in the coming weeks. Even if you do not see a doctor until a month following the accident, DO NOT EVER SHY AWAY FROM SEEING A DOCTOR AND ATTRIBUTING YOUR PAIN TO THE ACCIDENT inasmuch as often soft tissue pain will worsen in time. What was an occasional ache may turn into a frequent pain and then you will have to see the doctor, whether medical doctor or chiropractor.
Here is a page from my website that tells you it IS NEVER TOO LATE TO REPORT PERSONAL INJURIES FROM A CAR ACCIDENT:
http://www.settlementcentral.com/page0104.htm
Managing Your Medical Care after an Auto Accident:
http://www.settlementcentral.com/page0203.htm
I trust that this information has been of value to you, and thus I respectfully request that you locate the feedback form on this site and leave me some feedback.
Best Wishes,
Dr. Settlement, J.D.
www.SettlementCentral.Com
