Diminished Value: What Is It, And How Can It Affect You?
When your car gets in an accident, it will never be the same as it was before. Even if your car looks and runs exactly as it used to, having an accident on the record can still lower its value — sometimes dramatically. You could lose thousands of dollars by selling your vehicle later, compared to what you would’ve gotten before the accident. That’s especially frustrating if the accident wasn’t your fault. Luckily, this is where a diminished value claim comes in handy.
With Rhode Island’s diminished value laws, it’s possible to recover the difference from your car’s post-accident appraisal. Read on to learn about filing a claim from experienced RI car accident lawyers.
What is a diminished value claim?
A diminished value claim lets you recover the difference between your car’s pre-accident value and its current post-repair value from the at-fault driver’s insurance company.
As an example, say your vehicle was worth $20,000. Another driver rear-ends you and causes damage to your car’s back end. You’re able to get everything repaired, and your car looks and runs as good as new. However, your car is now worth $18,000 because of the accident on its record, meaning it lost $2,000 in value.
With a diminished value claim, you could pursue the $2,000 your car lost in value. This helps avoid a financial loss if you want to sell your car.
How does a diminished value claim work?
There are three basic types of diminished value claims, which are:
- Inherent Diminished Value: As you already know, having an accident on your car’s record can inherently decrease its resell value. So, with inherent DV claims, you may recover the difference in your car’s resale value before and after the accident.
- Post-Repair Diminished Value: If your car can’t be repaired to its original condition, this type of DV claim could help you recover the difference in the resell price.
- Immediate Diminished Value: If you want to sell your car immediately before making any repairs, this type of DV claim could help you recoup the loss in resale value.
While you’d normally file a claim with the at-fault driver’s insurance company, if the at-fault driver was uninsured or underinsured, then you might be able to file a claim with your own insurance company if you have uninsured motorist coverage (UIM).
How are damages calculated?
Most insurance companies will use a formula called the “7c diminished value formula” to calculate the amount of value lost.
The formula is: Value of the vehicle x 10% cap x damage multiplier x mileage multiplier = Diminished value.
You can use a car accident diminished value calculator online to come up with an estimate.
You’ll need to input basic information about your car, like its year, model, make, and mileage. In addition, you’ll also need a good idea of how extensive the damage is — like any major structural issues.
You can also contact an auto body shop in Providence RI to assess your vehicle and get a diminished value estimate.
How to file a Diminished Value Claim in Rhode Island
If you meet the criteria, then you can file a claim directly with the at-fault driver’s insurance company. However, you may run into roadblocks along the way.
Depending on the provider, the insurance company may try to shortchange you on the full amount of your claim, or pressure you into settling for less — but if you know the worth of your claim, don’t settle for less.
You can learn more in our guide to negotiating with insurance companies. But a few basic tips to keep in mind include:
- Doing your research: Have any calculations on-hand so you can recognize and reject lowball offers.
- Being willing to compromise: Even if an offer feels too low, you can make counteroffers instead of simply rejecting it to show that you’re willing to work with the insurance company.
- Including pictures when you can: It might help to include images of the damage to your car – so the claim’s adjuster can see the impact for themselves.
If you can’t reach a satisfying settlement through negotiations, you can also pursue a diminished value claim through a lawsuit with the help of an experienced Providence lawyer.
How long is the statute of limitations for diminished value claims?
In Rhode Island, the statute of limitations for property damage is 10 years. However, if you’re also filing a personal injury claim against the at-fault driver from the same accident, you may need to file both claims simultaneously under Rhode Island law. So, if you also suffered injuries and want to pursue claims for those, the statute of limitations is narrower.
In Rhode Island, the statute of limitations for personal injury claims is 3 years after the date of the incident. If you’re interested in pursuing legal action, it’s best to contact a Rhode Island lawyer as soon as you can for their opinion on your case.
Rhode Island lawyers you can trust
If you have questions about diminished value or need help pursuing a claim, Petrarca Law is here for you. We have been servicing Providence and our surrounding community for over 20 years.
We’re the only Rhode Island car accident lawyers specializing in diminished value claims. In fact, we’ve even fought for diminished value legislation in Rhode Island and helped change the law.
We continually go to bat for our client’s rights and we’re committed to getting the full value of your car.
Contact our office today for a free consultation and put the best Providence attorneys at Petrarca Law on your team