Car Accidents: Total Loss and Diminished Value
Florida motor vehicle accidents come in all shapes and sizes. A car accident may be a simple fender bender with little damage, or it may be a major incident that destroys a car.
There are two primary parts of a motor vehicle claim: Personal injury and property damage.
- Personal injury refers to the injuries drivers and their passengers sustain in an accident. Injuries may be relatively minor, such as cuts and bruises, or they may be severe, resulting in loss of limb or permanent paralysis. In especially tragic accidents, fatalities may occur. Claims for personal injury may reach seven figures.
- Property damage refers to the physical damage the motor vehicle sustains in the accident. In some cases, the car can be repaired. In others, it is no longer drivable.
How is property damage assessed on a vehicle?
After an accident, the parties should notify their insurance companies. An adjuster will meet with the motor vehicle owner and take photographs of the car. The insurance company may also have the car assessed at an auto repair shop of its choice. The mechanic’s notes and the adjuster’s report will help the insurance company determine the extent of damage to the car.
If a driver’s personal property was also damaged in the accident, the driver may be able to file a claim for these costs as well. Laptops, infant car seats, and other expensive items may all be claimed if they were damaged.
If the insurance company determines that a vehicle is a “total loss,” it means that the damage the car sustained in the accident surpasses 70 percent of the car’s fair market value. If the car was worth $10,000, and the accident caused $7,500 in damage, the car would be deemed a total loss. A total loss may also occur when, even if the insurance company pays to repair the car, it will not be safe to drive. In these situations, the insurance company will not pay to repair the car. Instead, it may pay the fair market value of the car based on its condition before the accident.
To determine the total loss claim amount, the insurance company will calculate the cost of replacing the car and subtract any depreciation that occurred before the accident. The insurance company will study the cost of similar cars in the area. Mileage and damage from previous accidents will be used to calculate the car’s depreciation.
Diminished value claims occur when two things happen:
- Another driver is at fault for the car accident and
- The insurance company decides it will repair the car.
When a car is repaired, it will never be worth what it once was. The fact that the car was involved in an accident will permanently reduce the value of the car. Therefore, a diminished value claim aims to reimburse the motor vehicle owner for this loss.
Diminished value claims are brought against the at fault driver’s insurance company. However, it can be difficult to put a price on the diminished value of a car, as one must speculate how much a potential buyer would have paid for the car had it not been involved in an accident. In some cases, an appraiser may need to be hired.
Do you have a property damage claim?
If you were involved in a motor vehicle accident and your car was damaged, let the accident attorneys at the Shiner Law Group help you determine your rights to recovery. To schedule a free consultation with our attorneys, call 561-777-7700 or visit www.shinerlawgroup.com.