Diminished Value Claims in California

What is a diminished value claim in California? Chances are, you know what it is, but you may not have heard it referred to as a “diminished value claim.”

If you are involved in a vehicle accident caused by another driver’s actions, chances are you may be able to recover compensation for your various losses. This includes medical bills, lost wages, and even pain and suffering damages. These are losses for personal injuries you sustain, but you may also be entitled to compensation for vehicle repair fences. One overlooked aspect of this type of property damage loss is the reduced value the vehicle experiences due to the accident.

The Types of Diminished Value Claims 

Diminished value claims in California can be categorized mainly into three types, each addressing a specific form of value loss due to accident damage:

• Immediate diminished value: This refers to the difference in your vehicle’s market value immediately before and after an accident, before any repairs have been done. However, this form of claim is not commonly pursued in California since most claims are made after repairs are completed.
• Inherent diminished value: The most common type of diminished value claim accounts for the loss in value that persists even after comprehensive repairs have been made. Essentially, it’s based on the notion that a vehicle with an accident history, despite being fully repaired, will likely fetch a lower market price than a similar, non-accidented vehicle.
• Repair-related diminished value: Sometimes, repairs do not restore the vehicle to its pre-accident condition, either due to improper repairs or the use of non-original parts. This type results from the perceived loss of value due to the quality of repairs.

Understanding these distinctions is crucial for any vehicle owner pursuing a diminished value claim. The inherent diminished value claim is most relevant for individuals seeking compensation for the perceived loss in their car’s market value due to an accident.

How Do Insurance Carriers Calculate Diminished Value?

Insurance carriers employ specific methodologies to calculate the diminished value of a vehicle after an accident. Understanding this process is crucial for anyone filing a diminished value claim in California. Typically, insurers consider several key factors:

• Severity of the damage: The extent of the damage your vehicle sustains plays a significant role. More extensive damages usually result in a higher diminished value because they impact the vehicle’s structural integrity and future performance.
• Vehicle’s age and mileage: Older vehicles or those with higher mileage tend to have a lower pre-accident value, which can affect the calculated diminished value. The rationale is that newer, low-mileage vehicles suffer a more significant percentage loss in value after an accident.
• Market value: The current market value of your vehicle pre-accident is also considered. This is often determined using industry-standard guides or databases that track vehicle sales and valuation.
• Pre-existing conditions: Any pre-accident conditions or previous damages to your vehicle are accounted for, as they can influence the overall diminished value calculation.

Insurance companies may use formulas, such as the 17c formula, or software to estimate the diminished value. However, these calculations often offer a baseline figure, and negotiating with the insurance carrier for a fair settlement might require the assistance of a knowledgeable attorney who can challenge their assessments with solid evidence and expert appraisals.

Working With an Attorney

If you have been injured or sustained property damage in an accident caused by the actions of another driver in the Orange County area of California, we encourage you to contact an attorney as soon as possible. A car accident lawyer in Orange County can help you navigate every aspect of your claim, both to recover compensation for your injuries as well as compensation for any property damage or diminished value that occurs as a result of the crash.