Diminished value

Hey guys,

So my '17 Limited WRX was hit last Friday and I'm in the process of getting it repaired. I'm planning to file a diminished value claim since my car is practically brand new. I'm pretty sure insurance companies will try to grossly undervalue my car to avoid paying out the proper value. Has anyone here dealt with this issue before and if so, what did you do to establish the "official" value of your car and the amount of diminished value that is appropriate? Auto value appraisers? Do a search online and try to compile an average value from cars with similar spec and damage in the area?

Thanks.

 

@pleiades ?

 

Minnesota doesn't really have any specific laws that address diminished value so it's a little tricky sometimes. It's all done on a case-by-case basis and (for us at least) you can only make a claim for it through the other party's insurance carrier (assuming they accepted liability). Basically you have to get a couple dealer quotes or statements showing what the vehicle would sell for with a clean history and how much it would be now. You'd probably have to wait until after the repairs are done so the dealer can take a look at the car and a list of the damages/repairs. I'd definitely contact the insurance company to let them know you intend to file for diminished value and find out what documentation they require for it and what their specific process would be.

 

Another Subie hit... :'(

 

Thanks much! I'm currently waiting for the other party's insurance to contact me back after I had given them my statement. Fortunately, I had the entire crash caught on my dashcam so hopefully it would expedite the liability aspect. Suppose I can contact Morrie's and Walser and see if they wouldn't mind giving me some estimates once things get going.

 

Just one more reason I need to stop procrastinating and get the dash cam Ive been looking at...

 

Do it. Once I uttered the word "dashcam" the conversation turned a lot more positive for me when talking to insurance folk. My agent was thrilled when I mentioned it.


Pleiades, how common is it to file a diminished value claim? I spoke with the other party's agent and they acted as if they had never heard of such a thing. I get they are just doing their job and avoiding paying more than they have to, but this agent seemed to have no idea and stated the car would be restored to original value with the repair. My understanding is once a claim and report is filed, the crash will eventually end up on a vehicle's Carfax and that can and likely will result in a vehicle selling for less than if Carfax was clean. Their agent told me there is a statute of limitations on filing a claim that is 6 years, and I would have to prove I had suffered a loss of a certain value for them to accept my filing of a claim.

I'm just trying to find out if I'm setting myself up for a load of work to reap minimal gains, or if the agent is playing dumb in an attempt to minimize paying out.

 

It really isn't something that comes up very often, mostly because there are no set laws or regulations on it in Minnesota and there's very little public awareness of it. In the last several years I've only had a few people even ask about it. The only state I've dealt with that does have a standard for it is Georgia (there's a link below to a website that explains how they calculate it there). I could be mistaken but I think we have to do it for every claimant in Georgia whether they request it or not. As far as the agent's statements, they're required to return your vehicle to pre-loss condition but whether or not the value was affected and if you're entitled to a diminished value payment is unrelated to that. As far as I know, any incident reported to state agencies or insurance companies will be on the vehicle's history. Like I said earlier, this is a tricky thing in Minnesota because of the lack of regulation so the insurance company may be reluctant and probably hopes you'll just drop it. If you have sufficient documentation it shouldn't matter of it's 6 years or 6 weeks after the accident and it shouldn't make a difference whether you keep the car for a decade or take an actual loss by selling the car next month.

https://www.yourmechanic.com/articl...e-diminished-value-of-your-car-by-elan-mcafee

 

Thanks again. From what I am finding out, it seems I may be taking this to an uphill battle that would probably require a court battle to gain anything in my favor. In that event, it probably isn't worth gaining myself a couple thousand dollars back at most. Guess that's something the insurance company is banking on. In all honesty, I am not all that interested in selling my car. I might if the new WRX comes in a hatchback, but otherwise, I tend to keep cars for at least a decade.

Seems the body shop is at least somewhat interested in ensuring my car is restored to like-new condition and stated they would only use either mint-condition used parts of the same model year, or new OE parts. Now I'm just waiting for the other's adjuster to examine my car and see what he thinks. In some ways, I would like to be like my wife and not care about cars, but I just can't. My car is so much a part of what me and what I enjoy.

 

Yeah, I stated to the body shop guy who was managing my case that I would like only new OE parts to be used. I felt he was quite honest with me and told me that they can and do utilize used parts, but only if they are in mint condition and of the same model year. He basically assured me that since my car is a 2017, he likely will not find any used parts this early in the year and will most likely be using new OE parts. I just want to be sure the other party's insurance isn't trying to go cheap and try to source junkyard parts and tell them to Bondo things together to look like new. Schoonover's is a reputable shop and my family has used them a few times in the past with very favorable results. However, it all boils down to the paying insurance company and how far it cuts into the bottom line of the body shop.

 

Yeah, Schoonover is a reputable place and Tom is a stand-up guy (I assume he's the one you're working with there). He's spot-on about the parts thing and the only issues we typically run into are with some aftermarket parts. They have a tendency to not always fit as well as it should and sometimes aren't the same quality as OEM. Lucky for you Minnesota is one of the few states where you can decline aftermarket parts, unlike Wisconsin.

Used parts on newer vehicles are in most cases a good option but as I'm sure you can guess it's more of a gamble with older vehicles. In any case, the shop always serves as a final quality-check both for the parts being used and the final repairs. If you had gone to some back-alley place trying to get a deal I might be concerned (and I've seen plenty of places I wouldn't even let touch a winter beater). I think your Subie will be just fine with Schoonover.

 

Yes, Tom is my contact at Schoonover's. He also handled my RAV4 back when it got a hit-n-run in the parking lot and the offender had bashed in the rear end and tore off the bumper. He told me up front they would have to utilize used parts since my car was a 1998 and was a dozen years old at that point. The bumper they sourced was practically new and the car looked better than before the hit.

Thanks a lot for your info. It is nice to have someone in the know who is a fellow Subaru enthusiast and understands both sides of things.

 

Here is the straight scoop from the best independent diminished value appraiser in the business. In Minnesota there is no restriction against making a third-party diminished value claim against the person responsible for causing the accident. The wording in his auto insurance policy indemnifies him for any damage caused by his negligence. In essence, the insurer agrees to cover the cost of any damages he causes in exchange for his premium.

There are very few insurance companies that will make a fair initial settlement offer and obtaining equitable compensation is like pulling teeth. I tell our clients that they need two things, a comprehensive diminished value appraisal and persistence. Those who persevere will be successful.

As a point of interest, one of our clients from MN told me the insurer said that MN state law requires her to sell her car in order to claim diminished value. I knew this was baloney but when I called your Dept of Commerce I was told the same thing. Again, not believing such an inequitable rule existed, I wrote to a senior examiner who called back to express his shock that his reps were giving out that false information. He has since set them straight. Very rewarding to be able to correct that problem.

 

Very good information^^^

I hate hearing stories like this about people who feel like they're being taken advantage of or mistreated by insurance companies. Obviously every insurance carrier is a business that needs to make sure they're not paying for anything they don't owe, both for insurance regulations and their own financial interests. Still, there's an obligation to indemnify for any and all damages or losses (within the policy coverage).

I try to treat every customer the same way I'd treat one of my own friends and never intentionally try to underpay or hold out on anyone in the hopes they'll just give up and take what I'm giving them. I've heard plenty of stories and preconceived opinions from people who feel otherwise, and this is the sort of thing that causes it.

I really hope the insurance agent wises up and that you get everything you're owed on this. It may take some persistence and legwork on your part, but I'd do it just on principle.

 

Who do you work for again?

 

GEICO. I was going to say it might be beneficial for me to keep it anonymous just in case there's any conflict of interest, but I've met up with several members while driving the company car so it's not really a secret.

 

Cool. I didn't intend it to be "outing" you or anything, so I apologize for making it public. I was more so intending to keep you (and whichever company) on the back burner just in case we have any issues with our current provider and want to make a switch.

 

Lol don't worry about it, I really don't mind. Like I said, I've never tried to hide it or anything.

 

Many thanks, St. Lucie and Pleiades. I ran the 17c calculation based upon what the adjuster told me the estimate was and what damage he found. I did the calculation as fairly and objectively as possible and came up with about $2800 in diminished value. According to the adjuster, the damage was mostly to doors and he did not think it extended to affecting structural components, but that remains to be seen once the shop starts tearing things apart. That amount seems rather low for me to seriously consider pursuing the insurance company for, considering the amount of time, research, and hassle I have to put into in order to even get them to acknowledge such a claim can be filed. I would not be surprised if the insurance company trains their agents with incorrect information just so it will create a cloudy environment to up the hassle factor for any potential claimants.

I get it. Like Pleiades said, insurance is a business and no business wants to pay more than they have to. Basic business 101. It really comes down to the consumer being educated and persistent enough to ensure they get all they are owed. Problem for me is the opportunity cost is likely going to be greater than what I'd likely get in return. No doubt even if I can get the insurance to begrudgingly pay me something to make me go away, It would be far less than what is actually appropriate. I am a small business owner ( I own a specialty dental practice) and like Pleiades mentioned, I try to treat each patient who sees me as a friend and do them right as best as I can. I do mess up from time to time and when I do, I own up to it and offer realistic and comprehensive solutions in an honest and objective manner, even if I end up losing on the outcome. People trust me for my expertise and for me to do what is best for them. I'm not giving them the shirt off my back, but I believe what I do is more than fair in a business perspective that results in people leaving feeling happy with their outcomes and feeling like I treated them well. I just have a hard time with companies who lose that perspective and see people as a sponge to be squeezed dry. Insurance never seems to have any issue with collecting my premium, but when it comes time to do their duty, they hem and haw till something forces them to pay up. I guess that may be the shortcoming of a larger company.

I don't know. I guess I'll probe the agent a little further once I have more hard numbers from the shop of total damage numbers and see if she actually looked into it like she said she would. I'm betting not. Problem is, I'm sure the lady is just doing her job and some higher-ups are probably telling her to ignore me request like a fart in the wind and hope I don't bring it up again.

 

I was at Schoonover today for a car we have over there and took a quick peek at your car while I was in the shop (I really like the Sparco wheels you've got on it, by the way). Doesn't look all that bad but Tom did mention they were going to put in a supplement request so the repair cost will most likely be increasing. I didn't ask for any details so I'm not sure how much or if it was anything significant, but I'd hold off on figuring out diminished value until after you have a final repair cost.

 

Thanks for checking in. I got those wheels from another member here who ended up selling his STI and no longer needed them. Have they started tearing into things yet? Yes, I figured I'd wait till things were pretty much completed before I recalculate the 17c and consider the claim.

As St. Lucie mentioned, it seems the misinformation is endemic within the insurance community as I had consulted with some others (insurance and legal) and all have told me that I'd have to had sold the car and prove some value loss before I could file for diminished value. At this point, I feel like I'd be embarking on an impossible quest to deliver a PSA to the insurance world and citizens about this possible claim.

 

They had the doors, RT/rear wheel, and all the exterior trim stuff taken off. Didn't look like they'd started on repairing the lower section of the quarter panel yet. That's pretty typical though, usually a shop will get all the disassembly done and then wait for the insurance company to reinspect before moving ahead if there's anything else they find.

 

Thanks. Talked to Tom yesterday afternoon. They did find more damage so they have parts ordered and are awaiting their arrival to continue work. Looking like 2-3 weeks to complete repairs. Can't wait to get my car back!

 

Thanks for making this thread. I've been concerned about the loss in value of one of my vehicles if it's ever in an accident and gets repaired...I don't want to take a huge hit when it comes to selling it some day. Very interested to hear your outcome!

 

No problem. I also hope the information contained in this thread becomes of use to others who suffer from the same misfortune. I spoke with a friend of a friend at a birthday party this past weekend about the issue. Just so happens this person had been an insurance agent for the same company of the at-fault driver who hit me. In the 8 years he had been an agent, he had never seen a diminished value claim paid out for auto accidents with that company in MN as far as he knew. He understood the issue and empathized with my concern, but he pretty much confirmed the insurance companies would require I have to prove a loss through the sale of the car, and that I received a lesser amount than if undamaged. The tricky thing is some companies would require a pre-accident appraisal and a post-accident appraisal in order to pay out. If I had the clairvoyance to know that I'd get hit, I'd take measures to prevent it, not go get an appraisal!

 

Insurance is in the business of taking money, not giving it back.

 

Holy poop! Yeah, a totalled GT3 would certainly merit a diminished value claim. I would imagine certain vehicles of a particular value and other valuables would get a diminished value claim paid out quickly. Like if someone's dog crapped on a Picasso or something. Yeah, you can restore it, but it will never be the same.