Overall, auto insurance is a good value proposition for every car owner. The premise is that for an affordable monthly sum, you get peace of mind that if anything happens to your vehicle it will be repaired or replaced.
But for all the benefits they provide, insurance companies can be frustrating when it comes to getting a fair appraisal for total loss claims and diminished value claims.
Understanding these two terms is the first step to getting the most value from your insurance claim after an accident. So let’s take them one at a time.
Total Loss Claims
Insurance companies label a vehicle as a “total loss” when the estimated cost to repair the car or truck exceeds what they deem the vehicle is worth.
According to Auto Claim Specialists, a national public insurance adjustor agency with whom GCAB works on a regular basis, at least 50% of the cases determined to be total losses by insurance companies are incorrectly ruled. This is because of the way that the perceived value of the vehicle is calculated by insurance companies. Remember, they are in business to make money, so sometimes you need to take extra steps to ensure they are doing right by you in all ways possible.
In the case of an accident that insurance companies advocate as a total loss, we highly recommend getting a comprehensive auto appraisal report by an independent appraiser. Such reports provide in-depth analysis of what your specific car was worth at the time of the accident, rather than what cars like yours are generally worth.
The difference can be substantial. In fact, 25-30% of the time your vehicle may actually be deemed repairable and not a total loss. And even if it’s not repairable, you’ll know the real replacement value to ask for.
Diminished Value Claims
“Diminished value” refers to the loss in market value from a vehicle’s pre-wreck fair market value due to damage that requires cosmetic and/or mechanical repairs.
In layman’s terms, this boils down to the fact that a vehicle that has been wrecked and repaired will not sell for same price as a like-kind vehicle that has not been in an accident.
According to Robert McDorman, founder and proprietor of Auto Claims Specialists, 43% of people surveyed would not buy a car that has been in a wreck and repaired. More to the point, 45% would only buy a post-wreck car if the price were deeply discounted.
Which is why in case of an accident where your car has been damaged and the other driver has been deemed at fault, you may be entitled to the monetary difference between the value of your vehicle prior to the accident and what the diminished value of the car is after repairs.
Of course, any accident can be traumatic, whether it is your fault or not. The last thing you need is for your insurance company to add to the trauma. Remember, part of what you’ve been paying them for is peace of mind. Make sure they deliver by correctly calculating the total value of your loss, and paying the full amount you are entitled to.
This article can help you understand your options in the case of a total loss. Similarly, this article will help you understand how to get an insurance company to pay the full amount due in the case of a diminished value claim. If you still have questions, contact GCAB. We’ll be happy to help you navigate the process.