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PERCEPTUAL DIMINUTION OF VALUE:
the perceptual loss of your vehicle retail market value from an accident or incident.
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REPAIRER RELATED DIMINUTION OF VALUE:
loss of vehicle market value due to inferior quality repairs.
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INSURANCE RELATED DIMINUTION OF VALUE:
loss of vehicle market value due to insurance claims practices and or failure
to provide for the proper repairs.
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Email Reply from
AccidentCheck Representative
"But maybe I should first explain how our program assesses the DV. First there is
the perceptual DV based solely on the disclosure of the damage. I would have to disagree
with one of your responses to an inquiry on your website in which you said that the DV
does not stem from the damage, but rather, it is often the repair work that causes loss in
value. Look at it
this way: At the moment of impact the car loses a tremendous amount of value. What's a
wreck worth in relation to what is was moments before the collision? The repair
process RESTORES that value, depending, of course, on then quality and the extent to which
the repairs are completed. So, a repairer is not liable for the perceptual DV. This is
beyond his control. After all, he didn't wreck the car. Given the choice between two
identical vehicles----one that was never hit, and one that just came from a body shop with
$8000.00 in repair work----which is worth more in the market for used cars? Perfectly
repaired cars suffer diminished value. It's a fact.
The second category is the Insurance Related DV. When a carrier places limits on a repair
by refusing to compensate the owner for the right parts, or selected procedures, the
carrier then takes control away from the shop and assumes liability for the resulting
defects. For example, no color sand and buff on the estimate means any dirt in the paint
gets charged to the insurance company. Aftermarket parts that don't meet the standards of
the original parts also cause Insurance Related DV.
The last and most familiar category is Repair Related DV. This is based on the defects in
the workmanship attributable to the shop. Mis-matched colors, mis-aligned parts, peeling
paint, parts omissions, unrepaired damage, etc. are all examples of Repair Related DV.
I applaud your work on your website because it lends credibility to the concept of
Diminution of Value, i.e., it is not a figment of our imagination. In fact, it is real and
something due to the consumer."
Thanks again,
Charlie Barone
Accident Check
Vehicle Inspections and Valuations
Diminished Value Information
Toll Free 877-875-7799
(tell them you saw them on Car Values Plus)
What is DV?
Diminished
Value, DV, diminution of value, loss in resale value, accelerated
depreciation….it’s called many things. It is the direct and actual loss or
reduction in an automobile’s market value due to its involvement in an accident
or other event. This loss can and does occur even when a vehicle has been
repaired properly.
You’re looking to sell your vehicle. You have found a buyer
who is looking at your vehicle and one other. The other vehicle is the same
year, make, and model. It has all the same options and is the same price. The
buyer looks at car number 1. The vehicle looks good and drives great. He asks if
it has ever been wrecked. No, he’s informed never a dent or scratch.
Your vehicle is just as clean and drives just as well. The
buyer asks you if you car has ever been wrecked. Silence for a few moments, and
then you say “Well…ah…ya…it was in the body shop for a little fender bender.”
“Nothing serious” you add.
Which vehicle are you going to buy when in that situation?
I always get the same answer. The obvious answer. The only logical answer. The
one that has never been wrecked.
Soon you realize that your going to have to lower your
price to make your vehicle more attractive compared to the undamaged one. You
have suffered a DV loss as a direct result of the accident. (note: selling your
vehicle is NOT required to determine the loss in resale value)
Diminished Value is broken down into three categories.
Inherent DV
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Loss in resale value to the damage history. Vehicle history
reports like CarFax make it know that the vehicle was wrecked and repaired.
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Voided factory warranty on the repaired area.
§
Missing vehicle ID tags that cannot be replaced.
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“R-DOT” decals on replacement body panels.
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Increased likelihood of mechanical failure.
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Impossible to duplicate immersion rustproofing techniques.
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Undiscovered damage.
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Increased likelihood of premature failure of bearing, seals and
electrical components.
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Paint that may not age or wear in a similar manner to the factory
paint.
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Factory assembly cannot be duplicated with an aftermarket repair.
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Vehicle no longer qualifies for the Manufactures “Certified
Pre-owned” program
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No evidence that the vehicle's frame or unibody structure has been
restored to all factory specifications, tolerances, strength and rigidity to
ensure deployment of the SRS (Supplemental Restraint Systems) at the factory
specified level of impact in the event of a subsequent accident.
Insurance related DV:
§
Generally, the loss is resale value due to insurance company claim
practices
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Specification of inferior generic parts.
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Failure to pay for needed parts, labor, or materials required to
restore the vehicle back to pre-loss condition.
Repair
related DV:
§
Generally caused by repairs that were paid for, but not done in a
quality and workmanlike manner.
Do insurance companies pay for
diminished value, or loss in resale value?
The answer is “it depends” on the circumstances
of your claim. If another driver was responsible for the accident, that person
would owe you for all of your losses that flow from the accident. This would
include things like the repair cost, rental car fees, loss of use, towing, and
storage just to name a few. It also includes payment for the diminished value of
your vehicle after repairs. The legal measurement of property damage is the
difference in the value before and after the accident. Repairs will restore some
value, but even high quality repairs cannot restore ALL the value for reasons
stated above. A claim for diminished value can still be submitted to the at
fault drivers insurer even if your own company paid for the repairs.
If, on the other hand, you are responsible for
the accident, payment for DV and other losses is dependant on your insurance
policy, and the laws and regulations that govern the conduct of shops, insurance
companies, and appraisers. And with all of that, there are many grey areas.
Insurance companies promise to restore you
vehicle back to its “preloss condition”, but fail to define exactly what that
means. See:
http://www.wreckcheckboston.com/resources.html
The policy also limits what the insurer owes
under collision coverage. “The most we will pay will be either the actual cash
value or the cost to physically repair the auto, whichever is less” The insurer
and the regulations fail to define “physical repair” in addition to “preloss
condition”. Can it be said that a vehicle with substantial repairs is exactly
the same as it was before the loss? Common sense, practical real world
experience, and all the experts say no. Our suggestion is to have your insurer
state, up front and in writing, what level of repair they will pay for. See:
http://www.wreckcheckboston.com/7levels.html This will go a long way to
instilling accountability when they limit payment for repairs. Keep in mind the
rate most insurers pay has remained flat from 1988 at $32-$36 per hour. Also
remember what they promised you: Preloss Condition. Failure to pay for
repairs to anything less than perfect could be considered a breech of contract.
The insurer may have some additional liability for the
repairs depending on which payment of loss method is chosen by them. Will you
car be repaired by the insurers estimate or the estimate of the repair shop?
This is extremely important to know See:
http://www.wreckcheckboston.com/news2.html
Buy having answers to these questions, and
knowing your rights, you can reduce the amount of diminished value of your
vehicle, hold the insurer accountable for their actions, and protect your
investment and family at the same time.
www.wreckcheckboston.com
Toll Free 877-875-7799
(tell them you saw them on Car Values Plus)
Get a FREE
Diminished Value Claim Review
HERE
Or try Wreck
Check of Boston
Or try Accident Check
