When you have been in a motor vehicle accident in the State of Alabama, the law allows you to submit claims for personal injury, property damage and diminution of value. The personal injury claim speaks for itself; however, Alabama Law also allows you to file a claim to the defendant’s insurance company for the diminished value of your vehicle. A person who has been in an Alabama motor vehicle accident is entitled to receive compensation for the decrease value of their vehicle. Decreased value of a vehicle is determined by comparing the pre-lost value of the vehicle subtracted by the value of the vehicle after the accident. This number is calculated, by comparing similar make, model of the vehicles with the same make and model of your wrecked vehicle.
The obvious reason as to why you would want to submit the diminished value claim is for the loss of retail value of your vehicle. Repairing the vehicle does not restore the vehicle to its original condition, nor does it restore the value of the vehicle. In fact, the factory assembly cannot be duplicated through repairs. Bearing, seals and other electrical components could have been damaged in the crash, but were not detected by the body shop or mechanic that repaired your vehicle. Also, the vehicle will no longer qualify for the manufactures “certified pre-owned” program and could possibly void existing factory warranties. The reality of trying to resell a vehicle that has been involved in a motor vehicle accident can be very complicated. The fact of the matter is that buyers are hesitant to purchase a wrecked vehicle.
Settling diminished value claims with insurance companies can sometimes be easier than settling your personal injury claim. When an insurance adjuster establishes a claim he or she sets the reserves. A reserve is an estimate of the amount that the insurance company expects to pay to satisfy the claim. Most insurance policies are written with two different provisions, one to pay for the bodily injury and the other for property damage. The reserve that the insurance adjuster has to set for the property damage is going to be different than the reserve for the bodily injury portion of the claim. The insurance adjuster can pay additional money to settle the claim without having to exhaust the bodily injury reserve. By utilizing the reserve from the property damage portion insurance policy, you can increase the value of your claim.
Recently, I was able to enhance a recovery in a Birmingham rear-end collision by also asserting a diminished value claim. My client had limited injuries and treatment; however, he had significant damage to his vehicle. I researched three vehicles of the same make and model and compared the price of those vehicles with the estimated price of my client’s vehicle after the repairs were completed. The difference in value of the three vehicles that had not been wrecked was substantially higher than the value of my client’s post-accident vehicle. However, the adjuster considered the difference without much of an argument. It is not feasible to submit a diminished value claim in every motor vehicle accident; however, in certain situations a diminished value claim can be not only viable but essential to maximum recovery.
The Birmingham personal injury attorneys at Farris, Riley & Pitt work tirelessly to continue to be innovative in their practice of the law. If you or your loved one has been effected by motor vehicle accident in Alabama, please consider contacting our office today for a free and confidential consultation. The number to call is 205.324.1212.