Diminished Value Claim Denial!
So you’ve been doing all this research on diminished value, and you’ve figured out that the at fault party’s insurance company should pay you for the lost value your car has suffered, right? The only problem is that you got a diminished value claim denial by the insurance company. Although it may make you want to rip your hair out, don’t get discouraged! It is very common for insurance carriers to deny diminished value claims as a tactic to weed out those victims who will be frustrated enough to just give up on their claim. They use this tactic because the sad fact is that most people DO give up. You know why? Forcing an insurance company to be fair is HARD! Also, there is generally nobody to help accident victims with their small value property damage claims and insurance companies know it. So where does that leave you? Is there any hope of recovering your lost value? Read on my friend, read on. . . .
I won’t sugar coat this: It’s not simple to get paid on a diminished value claim.
In fact, recovering a fair amount for it almost always requires the help of an expert and/or attorney. Even so, if you found this article, you probably still want to give it a go on your own, so I’ll try to provide some helpful information for your pursuit. So what do you do when you have received a denial? Send a counter demand! Your demand should clarify that an unfounded diminished value claim denial is not going work on you, and that you will not release their insured of liability until you have been compensated for all the damages you incurred, including your diminished value. Show them that you aren’t a chump. Become the problem claim. You found this article, so prove you have researched the matter by quoting some legalities involving diminished value. For instance, you could remind them that your claim against their insured is because of the negligent operation of a motor vehicle, and that for claims based in negligence (tort), the law clearly allows you to recover inherent diminished value (yes, in EVERY State in the US). State supreme courts rely on the “Restatement of Torts” out of the American Law Institute to address what damages a person can recover due to an auto accident.
The Restatement of the Law of Torts, Vol. 4. Sec. 928 states:
“Where a person is entitled to a judgment for harm to chattels (vehicles) not amounting to a total destruction in value, the damages include compensation for:
(a) The difference between the value of the chattel before the harm and the value after the harm or, at the plaintiff’s election, the reasonable cost of repair or restoration where feasible, with due allowance for any difference between the original value and the value after repairs, and
(b) the loss of use.”
So if you’ve gotten a diminished value claim denial, believe me, it is not because the law says you can’t recover it no matter what anybody says. In fact, if you have a third party claim and the insurance company / adjuster tells you that they are not required to pay diminished value by law, then they have misrepresented the facts (ask them what law). The law clearly requires payment for diminished value when it is proven, and the insurance policy they sold their customer says they will pay for damages that the person is legally liable for, so the question becomes about how you prove the amount of your lost value.
How To Prove Diminished Value After A Denial
Before we address that, think about how one would prove what a Rolex watch is worth, or how much a house is worth. Additionally, when you buy a vehicle and have to go register it and pay the taxes, if you disagree with what the tax office says your car is worth, what evidence will the tax office accept as proof of the value of your vehicle?
Here’s the answer. . .
In all instances, including inherent diminished value, the way an amount (fact issue) is proven is by “professional and competent appraisal” aka expert testimony / appraisal. In fact, insurance companies commonly use valuation companies to provide reports on the value of totaled vehicles. When the car is not totaled and a third party diminished value claim is pursued, smart companies hire an independent expert appraiser of their own for valuation assistance. Those that aren’t so smart (or ethical) either attempt to use some invalid formula to make a silly offer, or they flat out deny DV claims and hope the victim doesn’t know how to force justice. Remember, damage appraisers and insurance adjusters don’t generally qualify as expert witnesses regarding inherent lost market value. If somebody is giving you an amount on the lost value, ask them for their credentials and the formal appraisal which will disclose the scope and methods they used. Determining the amount of value a vehicle loses due to an accident history requires a lot of market research and meticulous record keeping. Claims offices don’t research market values. Adjusters evaluate coverage and scope of damages, and damage appraisers estimate and report on the scope of damages for adjusters. Value appraisers are neither adjusters nor damage appraisers. Valuation experts provide reports to attorneys, adjusters, damage appraisers, and others that demonstrate the MARKET VALUE of property / vehicles. At the end of this article, I’ll provide you with the rules of evidence about who qualifies as an expert.
Think about this. . .
If an insurance company is getting an evaluation on a vehicle that has been a previous total loss or which has a salvage title, without fail the value of the vehicle is dramatically reduced (usually 50%) because of the salvage history. If you ask an adjuster why they do that, it becomes pretty hard for them to explain without acknowledging inherent diminished value. If they reduce the value of previous total loss vehicles, then claiming that an accident history doesn’t affect the value of a vehicle is hypocritical. If insurance carriers and adjusters truly believed there is no such thing as diminished value, then they wouldn’t reduce vehicle values simply because of the history of total loss or salvage, would they?
Don’t Give Up!
Okay, so to summarize: if you get a denial on your diminished value claim, don’t give up. Write a counter demand letter and try to produce some quotes from dealers as a type of basic evidence on the amount of lost value. Remember, if you’ve gotten a diminished value claim denial on a your valid third party claim, it’s because the insurance company is simply hoping you’ll give up.
Fight for justice, and if it get’s too hard for you, reach out to a professional (LIKE US – hint, hint!). Do you think YOU would get away with damaging somebody’s property if you caused an accident? Don’t let the insurance company bully you or trick you into believing you don’t have a claim. One of the reasons Petty Details was founded is to help level the playing field for those who don’t give up on getting justice served. My background as a litigation and tort recovery specialist lends me a very particular set of skills that makes me a big problem for insurance companies or claims handlers who like to abuse the economics of litigation to take advantage of accident victims with smaller value claims.
If you can’t get them to pay on your own, you need an attorney or expert witness at the very least. If it comes to that, remember that expert opinion IS evidence. If you have an expert appraisal and a company argues that it is just an opinion, simply say, “so what?”. Are they challenging the expert’s credentials or methods? If they can’t demonstrate that the expert opinion is not valid evidence, then how will they convince a jury to ignore the evidence?
Remind them that every State has a formal rule of evidence that basically mimics the federal rule 702 below:
“A witness who is qualified as an expert by knowledge, skill, experience, training, or education may testify in the form of an opinion or otherwise if:
(a) the expert’s scientific, technical, or other specialized knowledge will help the trier of fact to understand the evidence or to determine a fact in issue;
(b) the testimony is based on sufficient facts or data;
(c) the testimony is the product of reliable principles and methods; and
(d) the expert has reliably applied the principles and methods to the facts of the case.”
That’s it! I hope this article helps you in the pursuit of justice. Information is always free at Petty Details, LLC!
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