Virginia allows that, even after proper repairs have been made to your vehicle,
you can recover the "loss of value" of your repaired vehicle in addition to the cost of the repairs.
Each state has its own Statute of Limitations regarding property
damage. The Statute of Limitations requires a claim to be settled or lawsuit initiated within a 5 year period in Virginia
after an accident has occurred. The Insurance companies and auto repair shops called this loss of value the "Diminution
in Value" or "Diminished Value" of the vehicle.
In layman's terms, "Diminution in Value" or "Diminished
Value" means the difference in value between a vehicle that has never been damaged and the same vehicle
after it has been damaged but has been properly repaired. Most of the time there is no significance difference but sometimes
there is a tremendous difference. For instance, if you purchased a $50,000.00 Mercedes and someone ran into you causing a
significant amount of exterior and inner structure damage, then even if you had someone make excellent repairs, the car would
still not be worth what an undamaged one would cost.
the choice of purchasing a car that had never been damaged or purchasing a car that had been in a significant accident, most
people would prefer the one that had never been damaged. How much is that difference worth? In determining whether there is
any diminished value and, if so, what the amount of the diminished value is, many factors are considered. Important factors
include the extent and nature of the damage to the vehicle; the cost of the repairs; the age of the vehicle; mileage and whether
the car is of special interest including limited editions, collector's cars, or if other special circumstances exist.
There are three types of diminished value that every consumer should
investigate after an accident;
Inherent Diminished Value - This is the type of Diminished Value most common in all insurance
settlements where the car has been repaired. It assumes a high quality of repair has been achieved and is defined as the amount
by which the resale value of a repaired vehicle has been reduced solely as a consequence of the vehicle now having a significant
Related Diminished Value - Repair Related Diminished Value can be considered as a claim in addition to
Inherent Diminished Value. It is generally described as the amount by which the resale value has been reduced as a consequence
of less than optimal repairs. For example, the door sill was straightened/ realigned during repair but some rippling of the
metal is still apparent. Such a repair may be functional, but falls short of the aesthetic condition of the original vehicle.
Immediate Diminished Value
- This is defined as the difference in market value of a vehicle immediately before the accident occurred and immediately
after. That is, before any repair work has been conducted on the vehicle.
Diminished value claims can only be made in
There are two types of motor
vehicle property damage claims under motor vehicle insurance;
The first is a "first party" claim
where you make a claim against your own insurance company under your collision coverage. These claims are made when you or
someone driving you vehicle is at fault.
The second type
of claim is a "liability claim", when
you are making a claim against someone else's insurance because they are at fault.
Diminished value claims in Virginia only apply to liability claims or 3rd party claims,
when the vehicle damage was caused by someone else's negligence, and not to first party "collision" claims, when
the damage results from the owner's fault or someone the owner allows to drive the vehicle.
Most insurance carriers doing business in Virginia are aware of "Diminution in Value" or "Diminished Value" claims
and regularly negotiate these claims when presented by the party whose auto has been extensively damaged by the negligence
of the carrier's insured (usually their policyholder). Keep in mind the insurance company normally will not voluntarily solicit
a diminished value claim but, when confronted with the proper documentation, they will consider it.
Proper documentation includes:
Photographs of the initial damages and supplemental damages if applicable.
2. Photographs after the repairs were completed.
3. Written appraisal, after repairs, documenting the condition of the vehicle and "loss of value" (this is the
difference in market value prior to accident and after repairs to vehicle), by a qualified appraiser.
Although the appraiser will assign a specific dollar amount to the diminished
value, the majority of insurance companies conducting business in the state of Virginia will want to negotiate. To be in the
best bargaining position, you should get an appraiser who has the best credentials to appraise the diminished value for your
specific vehicle, as that person will have the most credibility with the insurance company.
In Virginia, liability coverage of an automobile insurance policy states that the insurance
company will pay for all of the damage that its insured is legally obligated to pay. Insurers in Virginia typically consider
each claim on its own merits and pay diminished value when the investigation warrants payment.
However, Virginia law is silent regarding the issue of "Diminution
in Value or Diminished Value", and there is no method prescribed by law to determine the vehicle's
diminished value. There is no set formula or calculation method in place that can determine the correct diminished value of
your vehicle after the vehicle has been repaired. The insurer should consider any credible evidence of diminished value before
determining whether or not it is owed on a particular claim.
Adjustment, LLC can help with the process and help you try to recover some financial reimbursement for you loss. Please be
aware that this is a negotiation process only, not a guarantee, that the insurance company will pay but this is an option
in Virginia that you are entitled to pursue.