By: Jeremy Schatz, Managing Attorney, Virtus Law Group, Birmingham Alabama.
After a car wreck, the at-fault driver’s insurance company will rarely let you know that you are entitled to vehicle depreciation also known as diminished value. What that means is that you the others diver’s insurance will pay to compensate you for the value lost to your vehicle caused by the wreck.
How is vehicle depreciation calculated?
Many insurance companies use a formula called 17c (or a modified version of it) to calculate the diminished value of your vehicle. The formula takes your make, model, mileage, engine, year, color, etc. along with a damage multiplier (what had to be repaired) and comes up with what the insurance companies say is the diminished value of your vehicle.
However, much of the information they input can be arbitrary and completely at their discretion.
Do I have to accept the first amount that is offered?
Just like personal injury claims, diminished value claims can be negotiated. The insurance company will rarely give their best offer as their first offer but unfortunately, many people aren’t aware of this.
The best way to get higher diminished value offers is to get independent estimates from reputable sources such as the dealership that the car was purchased.
Founded in Birmingham, Alabama Virtus Law Group is a Personal Injury and Labor and Employment firm serving the people of Alabama.