The question can I make a diminished value claim is all over the internet. The answer to this question is also all over the internet. Unfortunately, many times people answer the question with a “no” because they do not understand the difference between first party claims and third party claims.
Diminished value claims are made after a car accident. The claim is for the loss of value the vehicle suffers because it has been in an accident. This is technically called inherent loss of value. In almost every State this type of claim is allowed and is recoverable.
So why is there so much confusion about whether a diminished value claim can be made? Because the question and answer do not specify who the claim is being made against and with diminished value, this makes all the difference in the world.
It is true, that in a majority of States, a claim made for diminished value against your own insurance carrier will be denied. This is called a first party claim. The reason it will likely be denied is that a majority of States, through legislative acts or court decisions, have made first party claims for diminished value impossible to pursue. A first party claim is based on your contract of insurance and the language and interpretation of that language. Many courts have interpreted that language as not allowing diminished value claims. Fortunately there is another option.
In almost every State, a claim against the at-fault driver for diminished value is allowed. This is called a third party claim and is not based on the language of any insurance contract. It is based on the law of negligence and damages. The claim is based on the notion that the at fault driver caused, by his or her negligence, your vehicle to lose value and he or she must reimburse you for that loss.
The answer to the question of whether a diminished value claim can be made is yes it can against the at fault driver and probably not against your own insurance company***.
Another diminished value myth is that if the repairs were done well, you car suffered no diminished value. People who say this are referring to repair related diminished value. This is a completely different claim and would be made against the repair shop and not the person who caused your accident. When your car is in an accident, even if OEM parts are used and the repair is done perfectly, there is still a diminution of value of your car because of the fact that it was involved in an accident. You can think of it this way, if you are shopping for a car would you pay the same for a car that has been in an accident and repaired as you would for the same car that has never been in an accident?
There are a few things that make the answer to the question of whether you can make a diminished value claim no. First is the statute of limitations. The statute of limitations is the time period in which you can bring a claim for damages. Every State sets its own statute of limitations. For example, in Maryland, the statute of limitations is three (3) years. This means that if the accident happened on June 1, 2010, one would have to settle a diminished value claim or file a diminished value lawsuit before June 1, 2013. If they did not they would be forever barred from presenting a diminished value claim.
The second thing that can prevent a diminished value claim is if you have signed a release. A release is a legal document that precludes you from making any more claims for the accident. Watch out when an insurance company asks you to sign anything and make certain signing does not affect your future rights to make a claim for damages. You should only sign a release when you are certain all of your damages have been addressed.
For more information, including how to make a diminished value claim please see www.whatisdiminishedvalue.com