What’s My Car Worth After an Accident?
By: Christian Patno
Motor vehicle accidents are an unpleasant part of life. According to a 2017 report by the Federal Highway Administration, there are roughly six million vehicular crashes that occur every year in the U.S. In Ohio, a motor vehicle collision often results in two types of widely recognized claims: “property damage” and “bodily injury.” However, there is third type of claim that is relatively unfamiliar to the public which is known as a “diminished value” claim.
Through a diminished value claim a vehicle owner is able to recoup the damage to the value of the car itself when the collision damage and repair are noted on CarFax. The measure of damage for this claim is the market value of the vehicle right before the collision as compared to the market value after the vehicle has been repaired.
Experts in such valuation exist within the car industry and can provide written opinions concerning these two values and the devaluation your vehicle has experienced due to the collision. Unfortunately, most people are unaware of the reduced value caused to their car until they go to trade it in on a new car, or attempt to sell it on their own. Car purchasers and dealers are likely to obtain a CarFax report which tracks the service and repair history of your vehicle in a national computerized database by Vehicle Identification Number (VIN). Depending on the degree of damage sustained by your car in a prior collision (and even if the car has been properly repaired) the value of your vehicle may well have markedly dropped from thousands of dollars to tens of thousands of dollars. The noted prior damage may also result in dealerships not desiring to take your car in trade on terms agreeable to you, and could well result in a private purchaser walking away from a sale since they simply do not want to purchase a vehicle which has been in a collision.
The largest diminished value claims involve exotic cars, rare cars with extremely low miles, and cars with the most significant damage which are not deemed a total loss. Diminished value claims do not exist where the vehicle has been determined to be a total loss, or to leased vehicles where you are not the titled owner.
In order to present a claim for diminished value you will need to document:
- purchase price of your vehicle
- geographic location, mileage at time of the loss
- whether the vehicle was towed from the scene or able to be driven away
- the final estimate for repair evidencing amount of damage
- date of loss
- prior or subsequent damage and repair
- written opinion of a knowledgeable used car salesman or insurance appraiser as to the difference between the value of your vehicle undamaged as compared to damage sustained on date of loss
Under the law of Ohio, you generally have two years from the date of the collision under the Statute of Limitations by which you must resolve the claim or be forever barred (unless you file a lawsuit). In order to present a diminished value claim to the at-fault party’s insurance company, you need to advise them of your desire to do so. Also, ask them what, if any, evidence they uniquely require to process such a claim. All insurance company claim requirements are unique and you will want to make best efforts to comply with the requested information they seek from you.
Should the at-fault driver not have insurance, or have an inadequate amount of insurance compared to the damage claimed by you, you will need to look at your own auto insurance coverage in order to assess whether you have uninsured or underinsured property damage coverage that will apply. Unlike suit against the at-fault party being governed by Ohio’s tort statute of limitations of two years, an uninsured or underinsured contract claim against your own carrier will be governed by the time period you must file your claim in court set forth in the contract. Usually the contracts limit these claims to two years. If the contract is silent as to this issue, Ohio’s contractual statute of limitation will apply. Currently a written contract breach must be filed in Ohio within eight years of the breach.
The next time you, your family member, a friend or a co-worker sustains property damage to their vehicle in an accident where they were not the person at-fault, you may well wish to pass on to them this valuable information. In addition to property damage repair, an award from this additional claim can put you back in the position you were in, as it relates to the value of your vehicle.
Christian Patno is an MLCL Principal who specializes in Personal Injury, Wrongful Death, Medical Malpractice, Defamation, and Litigation.