When a vehicle is in an accident, its attractiveness to potential buyers may be stigmatized or lessened by the fact that it was damaged. Given a choice, a buyer will purchase a vehicle without an accident history over another that has been involved in one or more accidents. Even when repaired, the vehicle may be subject to lingering questions regarding the quality of those repairs and its future safety and reliability. Additionally, repair centers may use inferior replacement parts or be required to fix “fit” problems because the accident caused bending or mangling of the vehicle’s frame or other significant parts, such as a bumper. “Fit” problems are often resolved by widening pre-existing holes or drilling new ones, installing shims between gaps and hammering metal back into place. It is these concerns that causes buyers to request or purchase a vehicle’s history from companies such as Carfax.com.
The stigma that attaches to a vehicle involved in an accident may cause a decrease of or diminution in its value. For example, if a car was worth $20,000 before an accident and now is worth $15,000, this difference is the diminution in value. Ultimately, this diminution of value results in a loss in the resale value of the vehicle.
In New Jersey, as most other states, the owner of the vehicle may bring a claim against the person who caused the accident and demand “diminution in value” damages. If that person does not have insurance or the amount of insurance is insufficient to compensate for this diminution in value, the owner may make a claim under his or her own insurance policy’s underinsured or uninsured motorist coverage.
Investigations by the attorneys at Keefe Law Firm have discovered that many insurance companies are not compensating their insureds for diminution in value under either underinsured or uninsured motorist coverage. If you have made a property damage claim for damage to your vehicle where the other party was either uninsured or underinsured, but were not paid diminution in value damages, you may have a legal claim against your insurance company. For more information or to speak to an attorney who has handled diminution of value claims against insurance companies, please contact Keefe Law Firm.