Diminished Value is probably the dirtiest thing you can say to an insurance adjuster. Just say it and watch them get weird…Insurance adjusters are trained to be neutral and generally stoic by nature. It's pretty hard to "rattle their cage" unless you say the magic words "Diminished Value" or DV.
Diminished Value occurs when an automobile is involved in an accident, vandalism, storm or some other type of event where physical damage occurs.
There are three levels of diminished value:
- Stigma DV – the insurance companies involved will report your claim along with the settlement amount to data providers that will feed the information subsequently to CARFAX and AutoCheck. The vehicle will have a score that is impacted by this history and the value of the vehicle will depreciate up to 15% just because the vehicle was previously damaged.
- Frame / Structural DV – when there is physical evidence that a vehicle has been repaired extensively and the structure of the vehicle was compromised. The quality of the collision repair work is not in question, it is the fact that significant structural repairs were made to the vehicle. A good benchmark for the potential of structural DV would be collision repairs totaling to greater than $3500.00
- Sub-standard Repairs – physical evidence of poor quality repairs would significantly impact the value of the repaired vehicle. This compounds the DV effect as corrective repairs will be required before any estimate in DV can be ascertained.
Vehicle Data reporting sources like CARFAX & AutoCheck have created tremendous awareness, even fear and the american consumer is possessed with knowing vehicle history before they consider purchasing a vehicle. Great for CARFAX & AutoCheck, bad for insurance companies! Why? Because there are new businesses sprouting up every day to ride the Diminished Vehicle Value wave. There are companies like WreckCheck and TrueFrame that inspect previously damaged vehicles for repair quality in an attempt to restore a portion of the vehicles diminshed value. This comes at a price however, and the consumer must pay a few hundred dollars to get a certification that their vehicle was repaired properly. Sound fair to you? WRONG! You are sitting at a stoplight minding your own business and you get blasted from behind by a "texting teeny bopper" in mommy's Expedition. You are not at fault, and mommy's insurance company is quick to tell you they will be handling the repairs, but what about Diminished Value? Your vehicle is going to take a big hit in the value department and you won't be getting compensated for it?
CARFAX just announced that they will begin a classified listing service for automobiles. This will create more awareness as vehicles will only be listed "with" history reports visible for the consumer to peruse.
So if you're the victim of an accident and you believe you are not at fault, ask about being compensated for the Diminshed Value.