Diminished value or loss of value property damage claims
I just settled a property damage claim for a married couple who pursed a property damage claim for a car accident but not a personal injury claim. No other lawyer would take it because these claims are so small compared to personal injury claims. Normally, I would decline the case too, but the case was referred to me by a colleague, so I agreed to accommodate them.
The clients pursued it for nearly two years, without getting paid, and came in just before the two year statute of limitations was about to expire!
One reason they didn’t have any luck is that they made a claim for “diminished value.” The term “diminished value “has a very special meaning in the insurance industry, and diminished value claims, if handled improperly, fail pretty often. However, a claim for loss of property value due to another person’s negligence, when handled properly, is fairly routine. When I handle car accident cases, for example, I’ll put in property damage claims too. The mistake they made was reading on line about diminished value cases, and presenting their claim as a diminished value case. Once they did that, they hit a stone wall.
Diminished value claims are claims not to get the car fixed (or any other property for that matter) but for the difference between the pre-accident value, and the post-repair value. In this case, they had a new SUV with 9,000 miles on it, that was struck by a careless driver. Their insurance carrier paid for repairs, but even after the repairs were made, the car had lost a lot of value. Why? Because it has been in a serious accident, and that must be reported in the car’s history. When the client went into his dealer to check on the trade in value after the accident, he found out that the trade in value was far less than it would have been had the accident never happened. One estimate was $12,000 is lost value, just as a result of the accident. Some car related websites such as Carfax, AutoTrader, Kelley Blue Book, etc., have calculators that will permit you to put in data so you can see for yourself how much value your car has lost from an accident. Most people think when the car comes out of the shop and the bill is paid, they got all they are entitled to. When the lease is up, or they try to trade in their car, they get a shock. Unfortunately, this often happens after the two year statue of limitations expires and they’re out of luck.
Diminished value or loss of value claims are severely limited when they are made against your own insurer, because the insurance policy has limitation on what is covered and how much has to be paid. However, a claim against another negligent party is a claim based on tort law, and not an insurance policy.
Contact me through my website if you have questions about this. I only represent clients in Pennsylvania, so this is not intended as legal advice.