How to Claim Diminished Value

Even if it's repaired good as new, it won't sell for good as new.
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If you get in a serious car accident, your vehicle will never be worth as much as it was before. Even if the mechanic puts everything back together perfectly, the fact it's been in an accident diminishes the value if you sell it. Your auto insurance covers repair costs, but insurers refuse to cover diminished value, even if your car depreciated thousands of dollars. Recovering the money from your insurer or a third-party insurer is a long shot, but you may be able to pull it off.

Step 1

Figure out the value of your car before and after the accident. Used-car guides in hard copy or online are a good place to start. Salesmen at local used-car lots can tell you how much they'd mark your car down, given the damage that it experienced.

Step 2

Read over your policy and research state insurance regulations. A lot of policies specifically exempt diminished value from coverage. Insurance offices in almost all states have signed off on the idea insurers shouldn't have to compensate you for any loss of value from the accident.

Step 3

Talk to your insurance agent, present evidence of how much you've lost and ask him to help you. The Bankrate website says if the agent works for the insurance company, he'll probably support the company line but an independent agent may be willing to take your side.

Step 4

File a claim against anyone else involved in the accident. If another driver hit your car, contact her insurer with proof of your claim. Eight state supreme courts have ruled that third-party insurers don't have to pay diminished value, but that leaves you with 42 where you might have a better chance.

Step 5

Take the responsible driver or your own insurance company to court, depending on which approach has the best chance of getting results. This may lead to you spending money without getting any results, but sometimes courts swim against the tide. In June 2012, for instance, one California court sided for the car owner and against the insurer in a diminished-value case.

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