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Diminished Value Case Studies

Writer's picture: Richard TaylorRichard Taylor

Updated: Aug 11, 2020

An owner of a 2017 Jeep Wrangler Sahara had his vehicle damaged by an at fault; insured driver. The insurance company paid $9752.33 for the collision restoration, but when the Jeep’s owner inquired about diminished value the adjuster stated “your vehicle hasn’t lost any value, but as a courtesy we will give you $500.”  At that point the body shop referred him to DVAC.  We were hired to handle the appraisal for the Diminishment of Value (DOV) claim. We immediately enacted The Appraisal Clause.  The at fault insurance company was compelled to hire their own appraiser.  We had a brief discussion about the DOV and quickly agreed the vehicle owner was entitled to $5355.  



Insurance companies will often Block and Stonewall. (BS). 1) we don’t owe for that. 2) we need supporting documents. 3) we don’t agree with the documents. A client with a 2018 Lexus with 30k miles on the clock was hit by an at fault insured driver. They paid out $15,688 for the repairs. When our client requested compensation for his Diminishment of Value (DOV) the usual scenario played out.


1) The Insurance Company states “your vehicle is fixed. WE DON’’T OWE YOU FOR LOST VALUE.” 2) “You need to hire an expert and prove the diminished value.”  3) “We don’t see that your expert has proven loss of value.” Our client listened to DVAC and stood his ground. The claim went from 1) denial, offer of $0. 2) Well,  let us look at it, (two weeks later), as a courtesy we will pay you $3000.00. 3) “Our appraisers need to discuss the loss of value.”  He received $8500.00. It pays to hire a licensed Diminished Value and Total Loss Professional.  






A DVAC Client was hit by an at fault/insured driver. The at fault driver caused almost $18,000 of collision damage to our client’s 2019 GMC truck.  The at fault insurance company paid for all the repairs. When our client inquired about a Diminishment of Value (DOV) settlement, the at fault Insurance company outright denied the claim.  “Prove it, we paid for your repairs and we don’t BELIEVE your truck has lost any value.”  DVAC was hired and we proved that our client incurred a $7500 DOV.  The responsible insurance company had no choice; they settled and sent our client a settlement for the full amount.  Always get a second opinion from a licensed appraiser.






A lawyer had a client that was hit by an at fault insured driver. The responsible insurance company agreed to pay for $14,088.17 to repair the 2020 Chevrolet Silverado, however, only offered $1200 for the Diminishment Of Value (DOV). The lawyer representing the accident victim asked DVAC what we thought the insurance company should pay for the diminished value, after analyzing the Estimate Sheets of Record, DVAC determined the DOV to be $4250. That’s exactly what the truck owner received from the responsible insurance company.






Diminished Value and Total Loss Settlements 


 
 
 

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Understanding Automobile Diminished Value

Introduction: In the realm of automobiles, the concept of diminished value is crucial yet often misunderstood. When a vehicle is involved in an accident, its value can decrease even after repairs have been made, due to factors such as damage history and perceived reliability. This phenomenon is known as diminished value, and comprehending its implications is essential for both buyers and sellers in the automotive market.

What is Diminished Value? Diminished value refers to the reduction in a vehicle's resale worth after it has been damaged and subsequently repaired. Even if the repairs are performed meticulously and restore the vehicle to its pre-accident condition, the fact that it has a history of damage can impact its value in the eyes of potential buyers.

Types of Diminished Value:

  1. Inherent Diminished Value: This type of diminished value occurs due to the perception that a vehicle with a history of accidents is less desirable than a similar vehicle with no such history, even if repairs have been carried out expertly.

  2. Immediate Diminished Value: Immediate diminished value is the reduction in value that occurs immediately after an accident. It reflects the decrease in the vehicle's worth due to the visible damage it has sustained.

  3. Repair-Related Diminished Value: Repair-related diminished value occurs when repairs, although performed properly, are not sufficient to restore the vehicle to its pre-accident condition. In such cases, the vehicle may still have underlying issues that affect its value.

Factors Affecting Diminished Value: Several factors can influence the extent of diminished value a vehicle experiences:

  1. Severity of Damage: The extent of damage sustained by the vehicle in the accident plays a significant role. Vehicles with extensive damage typically experience higher levels of diminished value.

  2. Vehicle Age and Mileage: Older vehicles or those with high mileage may experience greater diminished value since they are perceived to have less remaining useful life.

  3. Vehicle History: A vehicle's accident history, even if the damage has been repaired, can impact its value. Buyers may be wary of purchasing a vehicle with a history of accidents.

  4. Market Demand: The demand for a particular make and model in the used car market can affect its diminished value. Vehicles in high demand may experience less diminished value compared to those with lower demand.

How to Determine Diminished Value: Determining the diminished value of a vehicle can be challenging and often requires professional appraisal. Several methods may be used, including:

  1. Comparative Market Analysis: Comparing the value of similar vehicles with and without accident histories can provide insight into the diminished value.

  2. Professional Appraisal: Hiring a professional appraiser experienced in assessing diminished value can provide a more accurate valuation.

  3. Diminished Value Calculators: Online tools and calculators can provide rough estimates of diminished value based on factors such as vehicle make, model, age, and extent of damage.

Conclusion: Automobile diminished value is a significant consideration for both buyers and sellers in the used car market. Understanding the factors that contribute to diminished value and how to assess it accurately can help individuals make informed decisions when buying or selling a vehicle. Whether seeking compensation for diminished value after an accident or negotiating a fair price for a used car, awareness of this concept is essential for navigating the complexities of the automotive market.

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