California Diminished Value Claims
Vehicle accidents can lead to tremendous expenses for victims. Not only will a vehicle accident victim incur medical expenses if they are injured, but they can also incur tremendous property damage expenses. Even if the insurance carrier of an at-fault party pays for the repairs of the vehicle, the owner will still experience a diminished value of their vehicle.
There are various reasons why a vehicle’s value decreases by more than just the repair cost after an accident. This can include, but is not limited to, the following:
- Repairs could structurally compromise and weaken the vehicle
- There may be undiscovered damage to the vehicle
- It may not be possible to return the vehicle to the pre-accident condition
- The vehicle warranty may be voided
- Dealerships may not be able to sell the vehicle as “certified pre-owned”
- Replacement parts are usually not as good of quality as original OEM parts
- Buyers are usually reluctant to purchase vehicles that have been in an accident
What is a Diminished Value Claim?
In California, victims of an accident are able to file a “diminution of value” claim in an effort to account for the diminished value of their vehicle. After an accident occurs, the insurance policy of the at-fault driver should compensate you for the diminished value of your vehicle. However, many insurance companies deny these claims even though they have no legal basis for doing so.
There are three types of diminished value in California:
- Immediate diminished value. This is the difference in the vehicle’s value before an accident compared to the value after the accident and repairs have been completed.
- Inherent diminished value. This is the type of diminished value that occurs after a vehicle has been repaired to its original condition, but is considered to be worth less because it has been involved in an accident. Basically, this type of diminished value is the perception of anyone who may buy it or take it as a trade-in.
- Repair-related diminished value. This type of diminished value is caused by the lost value caused by the quality of repairs. For example, if the paint color is not the correct match or if lower quality or generic parts were used in the repairs, there will be further diminished value.
If you have questions following a car accident, a qualified car accident lawyer from Rosenthal Law can help during a free consultation.
Time Limit to File a Diminished Value Claim
California places a three-year statute of limitations for any diminution of value claims. The three-year clock begins ticking the day the accident occurs. Any vehicle accident victim who misses this three-year window will lose their right to bring a claim for diminished value.
Uninsured Motorist Crashes and Diminished Value
If you are involved in an accident that was caused by an uninsured motorist, it may be more difficult to successfully pursue a diminished value claim in California. In these cases, you should speak to your insurance provider. It may be possible for a diminished value claim to be paid from the uninsured motorist portion of your insurance. However, uninsured motorist coverage is not required in California, so be sure to check your policy to ensure you have this coverage.