Being in a car accident can cause some serious headaches—both physically and metaphorically. In addition to the potential head injuries you might suffer, being in an accident can mean dealing with the diminished value of your car, potentially costing you thousands of dollars. This article discusses how to calculate diminished value in Texas, and what you can expect as part of that process.
What is Meant by Diminished Value?
Essentially, a diminished value claim arises when your car is no longer worth the same amount as it was prior to your accident. The value of your car is lessened as a result of the accident, which means that if you go to sell your vehicle, you will receive less for it than you would have before the accident happened. After all, once a car is damaged, a reasonable customer who is looking to buy the car will most likely not expect to pay full market value for it, but rather only pay a diminished amount.
When Does it Make a Difference in a Car Accident?
There are various reasons a car may diminish in value after a car accident. Your car may have inherent diminished value, simply because it was in an accident and now has a history of damage, which will be indicated in its reports when you go to resell the vehicle. Additionally, your car may have repair-related diminished value, which can occur whenever the vehicle is unable to be restored to its previous condition, or whenever the repairs that are made leave a loss in value—for example, because aftermarket parts need to be used, or a particular match for restoration is not possible to attain.
How Do You Calculate Diminished Value?
Most insurance companies calculate diminished value by using a calculation called the 17c Diminished Value Formula. This formula takes into account several different steps and factors. It is important to note here that different insurance companies address the issue of diminished value in different ways, so it is essential that you learn about your insurer’s requirements, factors, and treatment of your claim so that you know exactly what you can expect.
First, you will need to determine the approximate value of your vehicle, which you can do through the NADA or Kelley Blue Book websites. Those sites offer a calculator when you input certain details, such as the year, make, model, and mileage, as well as the extent of damage done to your car. Most insurance companies will apply a 10% cap to this value, which represents the maximum amount that your insurance company might pay out on your claim.
Next, your insurance company likely will apply a damage multiplier, which serves to adjust the value of your vehicle based on the severity of the damage you incurred. Typically, most insurance companies use a number between 0 and 1, and that number will be based on the severity of the structural damage to your vehicle. For example, only minor damage to the structure and panels may use the multiplier of 0.25, while major structural damage will use the multiplier of 0.75. Following that, your insurance company will likely also apply a mileage multiplier, again ranging between 0 and 1, which will adjust the value of your car based on its mileage.
How Can the Attorneys at The Francis Firm Help Ensure That You Get the Most from Your Car’s Calculation?
It is important to have an experienced, knowledgeable attorney on your side when you are making a claim for diminished value. Insurance companies are often required to reimburse you for the reduction in your car’s value after repairs, but naturally, their main goal is to minimize your payout as much as possible.
Insurance companies will work hard to attempt to reduce any settlement offer, and they have significant legal and financial resources behind them. To level the playing field, you need the help of an experienced car accident attorney who is a skilled negotiator and can advocate on your behalf for a fair and reasonable settlement. It is important to assess your damages accurately, and our attorneys can help with this step.
At the Francis Firm, every Southlake, Texas car accident lawyer is an experienced, strong advocate for injured victims. We will conduct a free, in-depth review of your claim and fully investigate your automobile accident, including any diminished value claims. We will also help you get the right medical care you need, answer your questions, and clear up any misconceptions you might have. The experienced car accident lawyers at the Francis Firm will help you understand your rights and options, handling all correspondence and personal injury negotiations with the insurance company.
Please reach out to us today for a free, no-obligation initial legal consultation online or by calling 817-402-8959. With our office in Southlake, we serve communities throughout the Dallas/Fort Worth area, Tarrant County and Dallas County, and other counties of Texas.