Reader’s Question:

A friend here in West Virginia filed a claim on his car insurance policy for the damages on his car. His car insurance provider explained to him that his car already experienced diminished value. Because of that, he couldn’t get the same amount as when he bought the car, what is diminished value?

Robert

Huntington, WV

For example, the value of your car is $10,000 as stated by the National Automobile Dealers Association guide. You get into an accident and you have collision coverage as part of your car insurance policy. Now, you will file a claim to your car insurance company in West Virginia and they cover the repairs on your vehicle once you have covered the deductible and you make a decision on selling your vehicle. When you are looking around, you discover that you won’t get a payment for your vehicle that is near $10,000 since it has been ruined and fixed. What happened to your vehicle is that it went through diminished value which is also identified as diminution in value.

A lot of those who have car insurance have challenged that their car insurance companies are responsible to return their vehicles to its “pre-loss condition” after car crashes. A fiscal value is normally added to that condition and they say that a vehicle which has been in a car crash would get a lower value in the market in comparison to a same vehicle that has not been in a crash. This means that the value of the vehicle naturally reduces following a crash, no matter what the quality of the repair is. Consumer advocates believe that those who have car insurance are eligible for a diminished-value payment from their insurers once they file a car insurance claim in case they can prove that their automobiles have not been put back to its pre-accident condition.