Understanding Diminished Value Claims After a Car Accident

After a car accident, victims typically prioritize filing a report, making an insurance claim, and getting medical care if necessary. What many people don’t realize, however, is that insurance claims are not the only compensation options available to injured parties in the wake of an accident. Even if your insurance policy covers the cost of your repairs, the unfortunate reality is that the value of a vehicle typically diminishes from the moment an accident occurs.

This diminished value can wreak financial havoc on car owners long after the dust has settled. Fortunately, drivers in South Carolina have the ability to file a claim for the diminished value of their vehicle post-crash. Let’s dive into the ins and outs of filing a diminished value claim in South Carolina and discover how a car accident attorney can help accident victims maximize their settlement awards following a crash.

What is a diminished value claim?

Put simply, a diminished value claim is a request for compensation to cover the reduction in a vehicle’s resale or trade-in as the result of an accident. Even if your car looks as good as new after a trip to the repair shop, its recorded value will almost inevitably decrease purely because of its crash history. Given the fact that most car owners plan to one day sell or trade in their vehicles, any reduction in a car’s documented value can lead owners to suffer financial losses when it’s time to sell.

What are the different kinds of diminished value?

When determining the extent to which a vehicle’s value has diminished after an accident, it is important to consider the different types of diminished value that might apply in your case:

1. Immediate diminished value: This type of diminished value refers to the difference in the car’s value immediately before and after an accident without factoring in any repairs.
2. Inherent diminished value: This is the type of diminished value that typically comes into play in diminished value claims. It refers to the loss in value that occurs based on a car’s accident history, even if the vehicle is repaired.
3. Repair-related diminished value: Repair-related diminished value refers to a loss of resale value that occurs as the result of poor-quality repairs.

While automobiles naturally decline in resale value over the course of their lives, involvement in an accident can accelerate a car’s diminution in value, thus costing the owner additional money on top of the cost of repairs, rental cars, and other expenses. That’s why many drivers choose to file diminished value claims to help them recover some of the funds they stand to lose upon resale.

Can you file a diminished value claim in South Carolina?

Motorists in South Carolina are entitled to seek compensation for the diminished resale value of a vehicle following an accident, as long as the accident was not their fault. In most cases, the diminished value of a vehicle will be included as part of an injured party’s insurance claim against an at-fault driver. The total amount of damages associated with an accident is typically comprised of the return costs plus the diminution in value of the vehicle, and injured parties are entitled to recover these funds under South Carolina law.

As is the case for most accident and personal injury claims, drivers have three years to file a diminished value claim in South Carolina and must provide ample evidence to support their claim. While South Carolina does not require your own insurance company to cover your diminished value claim under your collision policy, you can typically file a claim against the at-fault driver’s liability insurance. You might be able to file a claim with your own uninsured motorist insurance in the event that you encounter an uninsured driver or experience a hit and run accident (check if your policy covers property damage).

Factors affecting a diminished value claim

Even if a vehicle is completely accident-free, its value will naturally decrease over time due to a variety of factors. The same can be said in cases involving diminished value, as multiple variables must be considered simultaneously to determine an appropriate diminished value estimate.

Some of these factors include:

• Age and mileage of the vehicle
• Severity of the damage
• Make and model of the vehicle
• Repair quality

Newer cars or luxury vehicles stand to lose more value as the result of an accident than vehicles with high mileage or a long history of prior repairs. Insurance companies will subsequently want to consider all of the possible contributing factors to a vehicle’s diminution in value in order to negotiate for what they feel is the most appropriate settlement in a particular case.

How to file a diminished value claim

Under South Carolina’s legal and insurance systems, car accident victims can generally file a diminished value claim in three basic steps:

Step 1: Gather all pertinent information about your accident, repair costs, and all of the aforementioned variables affecting resale value.

Step 2: Request an independent diminished value appraisal from an independent professional appraiser. This appraisal will play a vital role in determining the amount of compensation you should seek in your claim.

Step 3: Submit a claim including all of the information gathered in the first two steps to the at-fault driver’s insurance company.

Once you’ve submitted your claim, the other driver’s insurance company will likely attempt to negotiate and settle for a smaller amount than the face value of your claim. If you cannot arrive at a satisfactory agreement with the at-fault driver’s insurance company, South Carolinians may have recourse to file for arbitration in the county where the accident occurred.

Property damage arbitration in South Carolina typically requires both parties to present their evidence in front of a neutral third party who will ultimately decide on the appropriate amount of damages and assign responsibility in a case. While parties in property damage arbitration cases are not required to utilize the services of an attorney, they are permitted to hire representation should they so choose.

How a car accident lawyer can help

While it’s technically possible to file a diminished value claim on your own, working with an experienced car accident attorney significantly increases your chances of success, particularly in the event of contentious negotiations. Insurance companies often push back against paying the full amount of diminished value claimed by an injured party and may instead come back with low-ball settlement amounts.

In these cases, an experienced car accident attorney can help their client secure an accurate appraisal of their vehicle and its diminished value, take the lead on insurance negotiations, stay on top of deadlines and legal statutes pertaining to a claim, and offer additional legal services should a diminished value claim go to arbitration or result in additional legal action down the line.

Contact our team

As proud South Carolinians with over 20 years of experience serving our local community, the team at McGowan, Hood, Felder & Phillips, LLC is committed to helping accident victims fight for the compensation they deserve. With vehicle repairs, medical expenses, and insurance negotiations, car accident victims have enough on their plates without having to worry about whether their legal representation has their best interest at heart. Our team is here to help you understand your rights, navigate the legal system, and secure the best possible outcome for your case.

Give us a call today or fill out our online contact form for your free case evaluation. We’re standing by to answer your most pressing questions and to help you take the next step on your post-accident legal journey.