You might not know the correct insurance industry jargon, but if you’ve been in an accident, you’ve had a diminished value case. Unfortunately, many insurance companies don’t automatically include this loss when you file a claim. It’s up to the insured to file a separate diminished value claim to cover the inherent loss of value in an accident (even if it’s been fixed). Nobody is going to pay the same for a vehicle that’s been in a crash.
Maybe you think if you got those 1996 Mustang parts fixed after a collision, you’ve taken care of business. However, a diminished value claim makes up for the loss you’re going to incur when it comes time to sell the pony. Let’s say you have a car that’s worth $40,000, but after an accident it’s only worth $32,000. If you don’t have a diminished value claim filed, you’ll be the one making up that $8,000 difference.
Prepare in Advance
The best thing anyone can do is know their policy in and out. I spent one year researching and writing content for a century-old national insurance company and learned quite a bit during that journey. Unfortunately, most people don’t know much about their policy besides the premium and deductible. Not all policies are created equal, and you might be missing out on savings that you’re paying for monthly.
Talk with your agent about your diminished value policy or, if it’s not included, the costs to add on this feature. You might be surprised that you already have this coverage in place, but it’s buried deep in the legal jargon of your policy. It’s not something that insurance companies want to advertise, and who can blame them? It’s your responsibility to know what coverage you have.
Are You Missing Out Elsewhere?
A diminished value case is just one policy gem that you might not know about. Your carrier may use a number of ways to determine your compensation, but the “actual cash value,” or ACV, method is in your best interest and often goes hand in hand with diminished value cases. The ACV method determines how much repairs will cost minus depreciation and the fair market value of the vehicle, and it includes the broad evidence rule. Check with your agent to see if this is the go-to method for the company.
There are many other add-on features that your policy might already include, or you may want to tack on in case of emergency. Towing and labor costs, rental reimbursement and sound system coverage are just a few of the possibilities. Remember how expensive that last tow was? You can get that covered for (often) just a couple of extra dollars.
No Time to Skimp
Nobody likes shopping for vehicle insurance, but it’s one of the most important decisions you make. Having the right coverage in case you’re found at fault in a fatal accident is critical since you may be sued for millions of dollars. However, knowing you’re protected in case of a fender bender is also essential. Spend some time making sure you have appropriate protection behind the wheel.