Vehicles lose value after being involved in accidents. Even after they're fully restored to their original condition, they may not be worth as much as they did before the collision. You can ask the insurance company to pay the difference between what the vehicle was worth before and after the accident (known as a diminished value claim), but whether it does depend on three things.
The State Where You Reside
Each state has its own rules about the types of compensation people can sue for after they're involved in auto accidents. Unfortunately, not every jurisdiction allows for diminished value claims. So far, only 15 states have laws letting residents collect money for this type of loss, including Arizona, Illinois, Maryland, and Virginia.
That isn't to say you're completely out of luck if your state isn't on the list. First, laws change all the time, and a state that bars diminished value claims now may allow them at a later date. Second, there may be other statutes you can use to get compensated for this type of loss. If you haven't already, meet with an attorney who can go over your options for getting the compensation due to you as a result of the accident.
Who's at Fault for the Accident
Whether an insurance company will pay a diminished value claim will depend on who caused the accident. If the accident was caused by someone else other than the claimant, the liable party's insurance will typically pay, since it's responsible for restoring the injured party to the position the person was in before the accident. Even if the liable party was uninsured, your own insurance company will usually pay a diminished value claim if you file it under your uninsured/underinsured motorist coverage.
However, your claim will be denied if you're the one at fault for the accident. In fact, your insurance provider may prohibit you from even filing it in the first place if you're found to be liable for the collision. The company typically explains its policies in the insurance contract, so you'll want to dust yours off and look it over before going through the effort of asking the provider for compensation after this type of loss.
The Vehicle's Worth Before the Accident
A third thing that can determine whether you get anything for a diminished value claim is how much the vehicle was worth before the accident occurred. The newer the vehicle the more likely the claim will be paid because newer cars and trucks will experience the biggest value drop.
On the other hand, you may not receive much for an older and/or high-mileage vehicle because there may not be much value left. For instance, a 30-year-old car may have bottomed out as far as depreciation goes and you weren't likely to get much for it in the first place regardless of whether it was in an accident or not.
The only exception here would be cars old enough to be considered classics. Since the value is connected to the vehicle's collectability rather than the traditional salability, it's typically worth more than it normally would be and you would likely get compensated if the collision resulted in you not being able to sell the vehicle for what it's really worth.
However, classic cars are treated differently by the insurance industry specifically because of how they're valued. Thus, you may have more difficulty getting your claim approved for the right amount because the insurance company may try to use the traditional salability value rather than the collector's value. You should speak to an attorney about this issue for advice on how best to protect your rights.
For more information about this issue or help with your diminished value claim, contact a car accident attorney.
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