If Allen & Allen represents you in your personal injury claim, we are happy to discuss with you whether a related property damage claim for diminished value can and should be made.
In Virginia, if your car has been damaged due to the negligence of another person, you can recover not only the cost of repair, but also the “loss of value” that your vehicle sustained as a result of the accident.[1] This may not make sense at first glance, but in some cases, even professional repairs to a damaged vehicle do not restore the automobile to its pre-accident value.
Take the example of an antique car that has never been in an accident, was kept in excellent condition, and has been fully restored and maintained in mint condition using all original parts. If that car is involved in a serious accident and repaired, its market value will be significantly less than it was before the accident, even if the repairs are meticulous.
This principle is not limited to collector’s items. For newer cars, potential buyers prefer an undamaged vehicle to one that has been damaged and repaired. Generally speaking, buyers are willing to pay slightly more for a car that has never been damaged.
This difference in value is commonly referred to as “diminished value,” and these types of claims are commonly referred to as “diminished value claims,” or a “diminution in value claim.” The diminished value of a car can be calculated by comparing its market value before the accident to the vehicle’s market value after the accident and subsequent repairs.
In a case where a 3rd party has negligently damaged your vehicle, the law in Virginia recognizes that any loss in value should not fall on you, but rather on the negligent party. However, it is important to know that if you were at fault in the accident, then you most likely cannot recover the “loss of value” of your vehicle from your own insurance company.[2] Diminished value claims are generally limited to cases where you can establish that a 3rd party negligently damaged your vehicle.
The increased prevalence of vehicle history report services such as Carfax.com [3] means that potential car buyers today are more informed about whether an automobile has been involved in a serious accident. As a result, vehicle owners looking to re-sell their repaired automobiles are more likely to receive less value than in the past when potential buyers had to rely on the word of the seller as to the vehicle’s history. However, it is not necessary to sell your repaired vehicle in order to make a claim for diminished value.
A crucial step in the process is to have your vehicle appraised after it has been repaired. For a fee, used car dealers will appraise your vehicle, estimate its diminished value after an accident, and provide a written report of the diminished value. [4] Most insurance carriers require this documentation before they will even consider a diminished value claim. Of course, photographs of the vehicle before and after the accident can also be helpful.
As you deal with a personal injury claim, an attorney can help you evaluate your situation and determine if a related property damage claim for diminished value can and should be made.
About Scott D. Fitzgerald: Scott Fitzgerald is the great grandson of the Firm’s founder, George E. Allen, Sr., and is the fourth generation of the Allen family to join the Allen Law Firm. He is a Richmond personal injury lawyer focusing his practice on car accident cases in the Richmond, VA area. Scott is dedicated to protecting the best interests of his clients and defending their rights against insurance companies.
[1] See Averett v. Shircliff, 218 Va. 202, 237 S.E.2d 92 (1977).
[2] Note that it depends on the language in each individual policy and the law in each state, but in Virginia, the standard insurance agreement specifically excludes first-party diminished value claims. See Bickel v. Nationwide Mutual Ins. Co., 206 Va. 419, 422-23, 143 S.E.2d 903, 905 (1965).
[3] For a sample of the type of report that is available, see http://www.carfax.com/phoenix/vehicle_history/SampleReport.cfx?reportName=oneOwnerCleanLateModel.
[4] An affidavit with this information is even admissible in court in Virginia. See Va. Code §8.01-416 at http://leg1.state.va.us/cgi-bin/legp504.exe?000+cod+8.01-416.
