So many times I have people call me up and tell me that their car was damaged in an accident, repaired, but now they think it is worth less. And you know what? They are right. Think about it. If you see two cars that are the same, but one was in an accident and one was not, which one are you going to pay more for? The car that was not in the accident.
Insurance companies, however, will tell you this is not the case. They will argue, fuss and fight to say that a properly repaired card does not lose value. We call it diminshed value, or when we are trying to be fancy, dimunition of value. Most people just say “My car is worth less after an accident.” The insurance companies continue to fight this.
I recently brought a case for a client solely on two issues: diminished value and loss of use. (I will explain loss of use in a minute.) Now, this is not a promise of what would happen in your case, or that your case is similar. Or that you might get the same result. But I think its telling.
We submitted the matter to arbitration. The arbitrator ruled that my client’s car, even when properly repaired to the highest standard, lost value solely because it was involved in the accident. The arbitrator found that California law does allow for someone to recover diminished value as damages if they can prove the amount. In our case, it worked out to about $5,000.
The arbitrator also ruled, correctly, that my client suffered loss of use. In this case, he had a big truck that was damaged. The other party’s insurance company would only pay for a sedan. This didn’t work for my client who had some acreage and had to move things around on his property. But, he could not afford to put out the money needed to rent a truck. The arbitrator awarded him the difference between a truck and the sedan he rented – an amount just over $8,000.
In California, the law says that if your property is damaged, in this case a car, and you need to get a replacement, you are entitled to something that is similar to what you had. So, if you drive an SUV, then you are entitled to an SUV. If you drive a van, you are entitled to a van. The insurance company cannot dictate what you rent or refuse to pay for it. If they do, you have a remedy in suing for loss of use.
This decision is not groundbreaking. But it was issued by an insurance defense attorney, which means he makes his living representing insurance companies. It is the right result and the result that would have been achieved 18 years ago without litigation. Its an issue that may be worth fighting in some cases. You should consult with an attorney to make that decision.