When your vehicle loses value after an accident, you’ll need to find out how much if you plan to file a claim for compensation with your insurance company. This is where a diminished value appraisal comes in. The appraisal is a detailed calculation of the damage to your vehicle and its post-accident value, and it’s a critical first step to getting a fair settlement.

Here’s what to know about diminished value appraisals, what to expect as you go through the process, and how qualified legal support from our experienced damaged car attorneys can benefit you.

What’s Included In A Diminished Value Appraisal

Every vehicle loses value after being in an accident, regardless of the severity of the collision or the pre-accident condition of the car. How much value is the question that needs to be answered next and that’s exactly what an appraisal is designed to do.

There are several things that go into determining this figure in a depreciated value appraisal, including:

• Your vehicle will be inspected or you will be asked to submit a series of specific photos to document the condition of your car and the progress of repairs.
• You will be provided with a complete description of the damage your vehicle sustained, the location and severity of damage, and specific assessments of damage to safety components, vehicle suspension, or its core structure.
• You may be asked to submit photos, sales records, or any other documentation you have of your vehicle prior to the accident.
• You will be given a pre- and post-accident vehicle value and your depreciated value will be calculated for you.

Depending on who does the analysis, you may also get information about selling damaged vehicles, a summary of the appraiser’s experience and background, or a formal report in compliance with the Uniform Standards of Professional Appraisal Practice (USPAP).

What Happens If I Don’t Get An Appraisal?

A diminished value appraisal costs money to get, which many people feel is an extra unnecessary expense that ultimately lowers the total they receive in the end. But if you don’t get an appraisal, it may be harder to prove the damages you’re claiming if your insurance company decides to challenge it.

Remember that insurers rely on being able to deny or lower the value of claims in order to make a profit, so the more formal documentation you have to prove the damage to your car and what it’s worth, the better. You can still file a claim without an appraisal, but be prepared for the process to be more difficult.

Trading In Your Vehicle? An Appraisal Is Crucial

If you plan to trade in your vehicle, the value a dealership will assign to your trade-in after an accident is often lower than even the car’s standard diminished value. Many dealerships lower the value of the vehicle 20% to 40% off the top, before subtracting the costs of repairing and reconditioning the car and adding their profit margin.

An example might look like so:

• You have a new car worth $56,000 that’s involved in a minor accident.
• Its post-collision resale value is $50,400.
• You take the car to a dealership to trade it in and get a new, undamaged vehicle.
• The dealership subtracts 30% when you bring it to the lot and a $1,500 reconditioning fee.
• The dealer also adds a “used car pack” of $700. This is an arbitrary value to help cover the shop’s operating costs.
• Because your vehicle is expected not to sell quickly, a depreciation cost of $1,000 is subtracted.
• Finally, the dealership’s profit margin of 10% is subtracted.

In this scenario, your vehicle’s trade-in value would be $28,872. Say the dealership sells the vehicle for $47,500, just below its post-accident market value. With actual overhead costs only being a few thousand dollars, this transaction would net a dealer roughly $15,000 in profit.

Having a formal appraisal helps prevent dealers from undercutting you so much on your trade in value. For example, if you have an appraisal that estimates the post-accident value of the above car at $49,000, the dealership will have to have a good reason for why you were offered about half of that. Many dealers are forced to take a smaller profit margin on trade-ins with appraisals, since owners can prove the value of their car down to the penny.

Filing A Diminished Value Claim? We Can Help

If you’re filing a inherent diminished value claim after an accident, our experienced damaged car attorneys can help you get the maximum lost value from your vehicle. Contact our office today by calling 978-744-8000.

Finding out that your car has lost value after an accident – even though you’ve gotten it fixed – can be a low blow. This is especially true if you planned on selling it or if your vehicle was a collectors item that was worth a lot. In the past, drivers had to “eat” the difference between the pre- and post-accident values of their vehicles, known as diminished value, but now you can file a claim with your insurance company for compensation.

Here’s a look at when depreciated value claims may be covered by insurance and when they might not be, and what you can do after a car accident to increase the chances that your claim is covered and paid out at the maximum amount.

Comparing Coverage For Diminished Value

Prior to 2022, no insurance company in Massachusetts had to pay for diminished value. They only had to pay for damages directly resulting from the accident in terms of repairs. But when the Supreme Judicial Court ruled in favor of our client in McGilloway vs. Safety Insurance Company, a new precedent was set. Now, carriers are required to reimburse insured drivers for the diminished value of their vehicles after an accident on covered claims.

To be eligible to file a loss of value claim, the accident must have:

• Been the fault of someone else. In most cases, you won’t be able to file a diminished value claim for your own vehicle if you caused the accident yourself, even if you have full coverage. You’ll need to file the claim with the at-fault driver’s insurance, unless you’re filing with your own uninsured/underinsured motorist policy.
• Occurred a vehicle that you own. You can’t file for lost value of a car or truck that isn’t in your name or that you don’t own, including rented or leased vehicles.
• Involved a vehicle without prior damage. Usually, cars that have been in an accident before are low enough in value that there’s really no disparity between the worth of the car before the last accident and after.
• Resulted in fixable damage. Vehicles that have a salvage title or are declared totaled usually aren’t eligible for diminished value claims since the cars can’t be repaired or resold. Your car must be able to be restored to good or like-new condition to get a depreciated value settlement.

Other Reasons Your Insurance Company Might Deny Your Depreciated Value Claim

Unfortunately, insurance companies aren’t out to protect you. They may make it seem like they are, but that’s really just good marketing. Above all, insurers want to make a profit, and they can’t do that if they’re paying every single claim their covered drivers file. This means many insurance adjusters are trained to find things wrong with claims so they can be denied and the insurance company doesn’t have to pay those settlements.

Some of the most common reasons car accident and diminished value claims are denied include:

• You waited too long to file. You won’t be able to file a depreciated value claim in Massachusetts after the statute of limitations has expired. Even if you file before the expiry date, if you waited any length of time, the insurance company may try to use this against you.
• The vehicle wasn’t covered. Your claim will be denied if the car you’re filing for isn’t listed on your policy or otherwise isn’t covered, like if your insurance lapsed.
• You provided false information. If you misrepresented any part of your claim and the insurance company finds out, your claim will be denied – even if you would otherwise qualify.
• You had some fault in the accident. If both you and the other driver were at fault for the collision, your diminished value claim could be denied or reduced based on your percentage of shared fault.
• The insurer is acting in bad faith. In some cases, an insurance company will deny a driver’s claim in bad faith, meaning they had no legitimate reason to do so. If this happens, you’ll need to appeal the decision, which can take a lot of time and money.

When To Call An Experienced Massachusetts Damaged Car Attorney

If you were involved in a car accident and your vehicle lost resale value as a result, our veteran Salem, MA diminished value lawyers can help. Contact us for more information about inherent diminished value claims or to schedule a time to speak with one of our experienced damaged car accident attorneys. Dial 978-744-8000 or fill out our quick online form and our legal team will get back to you to answer your questions.