Diminished Value

Diminished value is the loss in a damaged vehicle's market value after repairs have been completed. It may be the best kept secret many insurance companies don't want you to know about. Whether you own or lease, you could lose hundreds or even thousands of dollars at time of sale or trade in through diminished value.

Suppose your car was damaged in an accident. It was then repaired and the repairs were absolutely perfect. This car has still lost value since it is now perceived by any potential buyer as "damaged goods." This type of loss of value is known as "Inherent Diminished Value" and it applies regardless of the quality of the repairs. There are two other types of diminished value as well.

"Insurance Related Diminished Value" applies when an insurance company did not allow for the needed repair procedures in the claim or when they required substandard parts to be used in the repair. As an example, a car was damaged on the right front fender and the inner panels also suffered minor damage; the insurance company specified replacing the fender with an imitation fender and did not allow for any repair to the inner panels even though they are visible when the hood is open. The imitation fender and the uncompleted repairs will both diminish the value of this car.

"Repair related diminished value" applies when a repair shop was paid to perform needed repairs but did not do them correctly. For example, if a repair shop was paid to repair and refinish a door but the paint is mismatched or has visible sandpaper scratches, this car has suffered repair related diminished value.

If your vehicle has been in an accident, you have lost money! This loss is owed to you for up to five years after the accident, either by your insurance company or the at fault party. And this loss is owed to you even if repairs were completed correctly!

Hawaii law is clear in the event of a covered loss, any economic loss is recoverable. To be fully indemnified (made whole), one is entitled to recover any loss in monetary difference between the value before the loss, to the value after repairs.

Diminished value has existed since before the horse and buggy days, but has always been difficult to specify as an exact dollar amount. A new system available through selected premier collision repair shops is changing that. The WreckCheck (TM) system uses a state-of-the-art computer program to provide a comprehensive evaluation of all three types of diminished value in a detailed, printed report. This report, by establishing a dollar value, is the first step in collecting the amount of diminished value owed to you. Feel free to contact us for additional information on this valued service.  To learn more, visit www.collisionconsulting.com