Two common mistakes of a do-it-yourself diminished value claim

Vic has a number of questions to answer for his claim. But the first step, which is where most people start, is to research the claim on line. It’s certainly helpful, but much of what one reads online is wrong, or at least misleading. So Vic read online about the claims and set out to make his claim by himself. Unfortunately he made the same two most common mistakes most do-it-yourself claimants make. The first mistake is that he went and got a value for the diminished value claim. The reason that it’s usually a mistake is because most people don’t understand that a report, opinion, or appraisal of diminished value is nothing more than that – an opinion. Opinions differ, and one so called expert can give one value and another expert looking at the same car might give a very different value. There are many reasons for this but two most common are these. First, there is some expertise that goes into an appraisal, and appraisals, opinions etc., depend greatly on the expertise of the person giving the opinion. Some so called experts are very good at antique or collector vehicles, but not so good at current SUVs, classic muscle cars or recent model sedans. If you ask for a report, they’ll give you one and charge a fee, but unless you know that their area of expertise pertains directly to your vehicle, you’re likely to get a poor or useless report. As for other car industry workers, they usually have no special training. Many of them are in sales or management, but don’t have any training or credentials in diminished value estimates. They may do it for free, but you will get what you pay for. The second reason that opinions differ so much is because of a built in bias in the system. Many appraisers, for example, get much of their business from auto insurance companies. As a result, they might be very cautious about providing a report that you are going to use for a claim against an insurance company. Their report is going to have their name on it, and if it’s presented to insurance company that sends them lots of business, they offend a good source of other business. No one will admit to this, but it’s how things work. So they may play it safe, and you’ll never know. The same is true of car dealers. If you bring your car there for a diminished value estimate, the dealer probably hopes that you will trade your vehicle in for one of theirs, and the best way to make the most profit on that deal is to give you a low value on the trade in. There simply is no way to assure that the value you get is in your best interest unless you’ve done a lot of these claims, and know who you’re dealing with.
The second mistake Vic made was to provide the value he got to other interested parties in the claim, and in my next post I’ll describe why that is the second mistake most do-it-yourself claimants make.

Think diminished value claims are easy?

Think that diminished value claims are easy? I’m dealing with one now that will change your mind. As of now, my client, let’s call him Vic, as in innocent victim, was driving home through Pennsylvania in winter. He pulled off on the shoulder of an on ramp to an interstate highway. He was nervous about the road conditions and he wanted to wait until the weather cleared up. Another driver came from behind Vic, lost control of his vehicle, and slid into Vic. Let’s call the other driver Dan, as is Dangerous driver. At the time of the accident, Dan was driving a car owned by Carmella, as in car-owner. I learned later that Dan was Carmella’s boyfriend. My client has damage to his vehicle and had to leave it, rent a vehicle, drive home that was in Virginia, then drive back when the car was repaired. He then went to trade in his car for a new one, when he learned firsthand how diminished value claims work. He couldn’t trade in his damaged vehicle for a fair amount due to the vehicle title report that showed an accident. So, he was stuck with a functional yet damaged car. He was given a value for the diminished value claim, but who does he make the claim against? Is it against his policy, or Dan or Carmella? Is it in Virginia or Pennsylvania? Does he have to go to court and if so, which court? What about lost time from work or the car rental charges to go back and forth to Pennsylvania? I’ll answer these questions one at a time as I post updates.

Inflated appraisal of damaged car and diminished value claim

Here's a situation involving a first party claim and a diminished value claim.

I bought a 2010 Subaru Forrester in Oct 2010. I paid $20,000.00 in cash and traded in my old car that was worth about $5,000. 10 months later, I got into a bad accident involving 6 cars under an underpass. I was at fault for the collision in front of me, but other cars hit me from behind and I am not at fault for that. When Progress came out to asses my car they said that there was $13,192 worth of damage and valued my car for more than $27,000. It was an awful estimate because they ended up putting out $18,726.16 (they claim they would have totaled if it hit $19,196). My car is and was worth nowhere near that amount, and Kelly Blue book value put it at $20,000. The dealer was shocked with that value when I brought the car there. Third, they never checked to ensure that my car was fixed properly and it was leaking transmission fluid that has now stained my street and driveway (since then that time it has been fixed). The car was just finally deemed fixed as of mid-December.

My issue is that my car should have been totaled. I keep cars 10 years. I just got this car, and now I feel that it has been cobbled together. I brought this issue to the insurance commission, but they don't feel that it is viable. I am just at my wits end. Would you happen to have any suggestions?


Here was my reply, in essence.
First, as you were at fault for part of the collision, you have no diminished value claim for that. You could conceivably make a claim for the diminished value from the collisions behind you, but somehow you’d have to separate out the loss of value from the front end collisions from the rear end collisions and that would be very difficult. As for suing your insurance company, that also would be hard. It’s odd that they valued a 10 month old car bought for $25,000.00 at $27,000.00. But to sue them for an appraisal that you think is wrong would be very costly. Also, many insurance policies require you to make a claim within one year of the event or you lose the right to make a claim.

Washington Court upholds diminished value claim

Here's a link to an interesting case involving diminished value for cars. It's a Washington State case, and also a class action suit. The court upheld the consumers right to diminished value under a Washington insurance policy. http://insurancenewsnet.com/article.aspx?id=323510