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Diminished Value Claims

Discussion in 'Model S' started by Mikial, Feb 27, 2014.

  1. Mikial

    Mikial Member

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    I have been following all of the diminished value threads here and on TMC, and was thinking that it would be helpful to compile a list of states that do recognize a diminished value claim vs. those that do not.

    I consulted with the PI side of my firm and can verify that such a claim in viable in Nevada. I am happy to give guidance to any NV owners that run into problems, but II think it would be very useful to have a complete list of states and providers for further reference in these forums (and on the TM forum).

    Please weigh in and lets try to get a complete list compiled...
     
  2. Canuck

    Canuck Active Member

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    #2 Canuck, Feb 27, 2014
    Last edited: Feb 27, 2014
    I don't understand what you mean by "states that do recognize a diminished value claim vs. those that do not." The principle behind diminished value claims, also called "accelerated depreciation", arises from the common-law rule that the at-fault party must put the plaintiff back into the position they would be in had the tort not occurred. I am not aware of any states, or provinces in Canada, that have legislation that varies this common law rule when it comes to accelerated depreciation claims, and I highly doubt there is such legislation. However, in some U.S. states insurers consider diminished value when adjusting an auto claim, and compensate the claimant after the vehicle is repaired. In Georgia, for example, it doesn't even matter if the accident was your fault. So perhaps what you are asking is "in what states do insurers accept diminished value claims?" But that questions must be heavily qualified because whether insurers accept the claim or not should not prevent people from pursuing this head of damages. In Canada, insurers strongly resist accelerated depreciation claims, and don't usually pay until met with a lawsuit. You can read more about these claims here (where I stole some info for this post):

    How do I get full value for my crashed car? - The Globe and Mail
     
  3. ElSupreme

    ElSupreme Model S 03182

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    I had non-frame damage, road hazard accident. Replaced my radiator, and cosmetic undercarriage pieces, in Georgia. Car was ~2 months old, was given ~$800 in diminished value.

    ~$86k sticker.
     
  4. Canuck

    Canuck Active Member

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    What was the total costs of the repairs?
     
  5. ElSupreme

    ElSupreme Model S 03182

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    ~$7000 dollars. About $3k for the radiator, and other mechanical issues. And another $4k for cosmetic fixes.

    For me $500, and about $70 a month more in premiums.
     
  6. Canuck

    Canuck Active Member

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    The $800 payment seems like a low amount because, it seems, someone looking to buy your car, with $7K worth of repairs, up against another one with no damage, would probably offer you less than just the $800 difference you received. But, on the other hand, since there was no "at-fault" party, you got $800 more than most people simply because you live in Georgia.
     
  7. ElSupreme

    ElSupreme Model S 03182

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    My thoughts exactly. You can appeal your 'diminished value' check in Georgia. But I don't plan on selling my car anytime soon. So I was not all that worried about the value. Also at the time used Model Ss were selling for ~$5k more than new price, as wait times were still ~4 months. I am not really sure how that would have affected my 'diminished value'.
     
  8. Canuck

    Canuck Active Member

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    That makes sense. There's also something to be gained by not having to deal with the hassle and aggravation of the insurance appeal process.
     
  9. howardc64

    howardc64 Member

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    I learned about diminished values claim from reading accident threads on TMC and suggested to my wife to pursue her mother's 2010 Subaru outback ($22k new) $5k front end accident repair. It was the other party's fault and their insurance company (state farm) definitely gave us the run around for quite awhile. Its clear either not a lot of people request for this or the insurance company gives you the run around by default hoping you go away. They finally offered $1k per some formula (so they say) if we sign a waiver (to never sue them for anything in the future of course).

    Wife's friend's Prius C also got rear ended with $10k repair bill and I also suggested she pursue diminished value claim. No results yet but the Toyota dealership where the car was purchased new was able to help her out with an appraisal. Of course they try to sell her a lease at the same time... claiming you never have to worry about diminished value :)

    After experiencing this process, I'd say the insurance company only have to give you a little bit to settle after giving you a lot of run around and frustration. If you can equip yourself with some basis for appraisal, I'd say you have a better shot of getting the actual accelerated depreciation.
     
  10. Mikial

    Mikial Member

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    Another thread indicated that such claims were not recognized in New Jersey. I am trying to find out what other states may not recognize them...
     
  11. Canuck

    Canuck Active Member

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    What do you mean by "not recognized in New Jersey"? The common-law applies in the US (like Canada) unless there is legislation to the contrary. If you are suggesting that there is legislation in New Jersey that prohibits diminished value claims, then from my quick Google search, that is not true (but is a commonly misconceived notion):

    Diminished Value Fact vs. Fiction - New Jersey - MMI Consulting, LLCNew Jersey Diminished Value MMI Consulting, LLC

    As I said above, I highly doubt any state or province has legislation that prohibits diminished value claims. But what you posted is what the insurance companies want you to believe.

    - - - Updated - - -

    You can always file a Small Claims action. No lawyer is required and insurers hate precedents on this issue so they usually settle for a greater amount than if not being met with a lawsuit. In Canada, unless faced with a lawsuit, insurers usually offer nothing. Note that the defendant in the lawsuit is the at-fault driver and not his or her insurer, but their insurer is required to defend and indemnify the driver.
     
  12. GDH

    GDH Banned

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    I am in Oregon.

    2 months after I bought a 2013 Volvo S60 T6 fully loaded, it was side swiped, not to bad only rear fender scratched....no frame damage. I sent Geico a demand letter and got $3K in DM.

    It's all about the attorney you use =)
     
  13. Canuck

    Canuck Active Member

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    #13 Canuck, Feb 28, 2014
    Last edited: Feb 28, 2014
    Not necessarily. First off, no good lawyer will handle these cases unless you happen to get a good young lawyer just starting out in his or her career. Sure, you can find a ton of lousy lawyers to handle them, and who are more than willing to take your money. But a good lawyer will tell you to get out his office, since these piddly cases are not worth his/her time nor should you pay legal fees for such a simple case. Draft the demand letter yourself and you can put the whole $3k in your pocket, rather than pay part of it towards legal fees.
     
  14. martinwinlow

    martinwinlow Member

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    Ahh… This would explain why I have heard that auto insurance can be very expensive in the US compared to the EU… we have no such thing, in the UK at least. Your fully comprehensive insurance pays for the the repairs and injury compensation (including those of 3rd parties) and that's it.
     
  15. Canuck

    Canuck Active Member

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    That's funny because the common-law, which we follow in Canada and the US, is based on the English common-law, which originated in the early Middle Ages in the King’s Court, a single royal court set up for most of the country at Westminster, near London. So, for you to tell us that there is "no such thing, in the UK at least" of diminished value claims is like telling us that there's no kangaroos in Australia. In fact, any kangaroos outside of Australia originated there, like the common-law originated in the UK. Diminished value claims started in the UK in 1974 with the case of Payton v Brooks [1974] RTR 169. Here's a webpage from a law firm in your neck of the woods that explains these claims:

    http://www.cfs-law.com/measuring-loss-diminution-claims.html

    There are so few diminished value claims, partly because people are unaware of this head of damages, and partly because any claims worth pursuing are mostly in relation to luxury cars, that the payouts have a negligible, if any, effect on rates.
     
  16. PV4EV

    PV4EV Member

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    Wrong !! Canuck is correct.


    I have fought and won two significant Diminution claims here in the UK.

    One was against a certain well known Italian brand that make a lot of red cars. A technician basically took my pride and joy for a 'test drive' one lunch time, lost control and did £70,000 ($115,000...) worth of damage. As you may know, potential car buyers of high value / rare cars do not like buying a car with bad history, hence fighting a claim for diminution. Only after wining a significant payout from said manufacturer was I able to dispose of the car but at a big discount to its proper value. Luckily the buyer had no love for the car company but loved the cars themselves (he worked for a rival 'brand'). But I know for a fact he then had major problems selling it some years later due to 'rumours' in the trade. I was unable to elaborate at the time due to signing a time-limited gagging order, which they insisted on as Top Gear would have had a field day with that story.

    The second case was when someone blind sided me entering my path from a side road. Using rather obvious evidence from a dash cam, I could show who was in the wrong and that I had right of way. After a short legal fight, they paid out. The accident actually involved 3 vehicles, mine was damaged and repaired, his was written off, and a 3rd vehicle hit as the guy was trying to escape was also written off due to low value. Total loss to the insurer in terms of diminution, repairs and a medical claim for a broken bone in my hand, was over £60k. After than I installed dash-cams in all my cars.

    I also know of two other successful diminution claims in the UK, one of which involved a Tesla in London ...
     
  17. zwede

    zwede 2013 P85+

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    Martinwinlow is also wrong about car insurance being less expensive in the EU. The EU country I have the most experience with (Sweden) has much higher auto insurance rates. Talking to friends there, the same car in Stockholm (1.2 million people incl suburbs) would cost about 50% more to insure than in Dallas-Ft worth (6 million people incl suburbs).
     
  18. GDH

    GDH Banned

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    Clearly I had a good lawyer, he's the one who got me the amount I got so you are wrong.
     
  19. Canuck

    Canuck Active Member

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    #19 Canuck, Mar 3, 2014
    Last edited: Mar 3, 2014
    I don't want to get in an argument with you. Good for you, you got what you wanted and you are happy with your lawyer. That's great. But I'm not taking any issue with that. I've been a lawyer for over 20 years, and I know from experience that any good lawyer would not handle your case. In fact, no good lawyer would take any claim within Small Claims jurisdiction unless there was a reason to aside from fees (and I doubt there was any other reason why your lawyer took your case). Good lawyers can't live off the amounts awarded in Small Claims because their fees greatly exceed the amounts of the awards. I'm sure the lawyer you hired was fine, but he's not one of the best lawyers in his field if he handled your piddly $3K case.

    So I disagree with your comment regarding "It's all about the attorney you use" if you mean that you used a lawyer who is ranked higher than other lawyers and I don't see how that statement can mean anything else. Lawyers who take cases within Small Claims jurisdiction are either just starting out, or are not good enough to get enough of the bigger cases that they no longer need to accept small claims matters. That's just a fact.

    But that's not why I took issue with your comments. My concern with you telling people "it's all about the lawyer you get" is that lawyers charge high fees and the amounts involved in accelerated depreciation claims are usually not worth paying legal fees. I have seen far too many people get taken in by shoddy lawyers over piddly cases. These types of cases are simple and Small Claims court is geared to not having lawyers (for the obvious reason that I am warning everyone about), and I simply wanted to warn people not to pay legal fees, which can be significant, when they can do it themselves. You don't know if you could have got that same $3K if you handled the case yourself. Having acted for many insurance companies, I know that demand letters from lawyers don't scare insurers in the least. They know that lawyer has said to his client: "I will draft the letter for x amount, but if I have to take it further it's xxxxx amount." Lawyers for insurers have worn down many people like you until you can no longer afford your lawyer. That's just part of the way the legal system works and I don't want to see that happen to people here. Even if you can find a lawyer who is willing to take these types of case on contingency there's no reason to give up a significant part of your settlement or award in legal fees.

    Peace :)
     
  20. NigelM

    NigelM Recovering Member

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    Mod Note: one post and reply went here - snippiness
     

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