Calculating the Diminished Value of Your Car

September 28, 2016 - Articles

In the state of Florida, if your car is involved in an accident and the fault lies with someone else, you have four years from the date of the accident to file a diminished value claim.

So, what is a diminished value claim, exactly?

After an accident, your vehicle will lose significant value – even if you pay for extensive repairs that restore the vehicle to its original condition.  Buyers tend to devalue vehicles with an accident history, however minor, and widespread access to accident history reports give buyers the information they need to conduct a full assessment.

A diminished value claim allows you – the vehicle owner – to recover damages from the at-fault driver’s insurance company to compensate for the vehicle’s lost value.  If you have been involved in an automotive accident, then it is important that you pursue your diminished value claim to its fullest extent.  Such claims are potentially worth thousands of dollars.

Of course, knowing how to determine diminished value of a car after an accident will help you understand the importance of pursuing a diminished value claim.

How to Calculate Diminished Value

Florida case law is clear about the calculation of diminished value.  Under McHale v. Farm Bureau Mutual Insurance Co. (1982), the total value of the claim is calculated by the cost of repairs plus the diminished value of the vehicle as a result of the accident.

The cost of repairs is a relatively simple matter – you are entitled to recover damages for the cost of reasonable repairs to return the vehicle to its pre-accident condition.  The diminished value of the vehicle after the accident can be further broken down into two component parts.

Stigma damages.

The intrinsic value reduction of your vehicle after an accident is sometimes referred to as stigma damages.  As described earlier, buyers tend to devalue vehicles with an accident history, even if the car is in pristine condition.

Repair-related damages.

Not all repairs will or can be executed perfectly.  In some cases, the car simply cannot be returned to its pre-accident condition.  As a result, the diminished value of the vehicle is not only based on the “stigma” of its accident history, but also on the actual physical deterioration of the vehicle itself.

Burden of Proof

As the plaintiff bringing a diminished value, you are saddled with the burden of proving the accuracy of your diminished value calculation.

What does the burden of proof mean for you?

When you carry the burden of proof as the plaintiff in a diminished value claim, you do not enjoy the default position.  The defendant insurance company (who does not carry the burden of proof) is presumed, by default, to be correct as to their own assertions about the real diminished value.

As the plaintiff, you must bring forth adequate evidence to prove your diminished value claim.  You must acquire the services of an expert appraiser to help determine actual losses, and you must take steps to ensure that all evidence is preserved for eventual litigation.

Pursuing a diminished value claim is easier with the support of an experienced team of attorneys.  Our team at Coffey Trial Law is committed to the success of your claims.  Contact us today.