Diminished Value Appraisal: Is It Worth It?

As soon as a vehicle is engaged in an auto accident, it is known to depreciate in value even when repairs are completed. When a car has been involved in a crash, the value of the car can be reduced — or ‘diminished,’ as this is known — because a buyer is hesitant to pay the full price for a car with an accident history. If you own a car and have lost value from this, getting a diminished value appraisal is an important step to compensate for this loss. But is the process worthwhile, and is it cost-effective?

If you’re looking into pushing for compensation, the diminished value demand letter from Mighty can make the difference. If you don’t want to involve an attorney in recovering your diminished value, this resource provides the information you need to draft an effective demand letter to the claims adjuster.

A diminishing value assessment is a valuation that an expert offers to compensate you for the gradual loss in value of your vehicle as a result of damage.

A diminished value appraisal is the result of an auto damage appraiser putting a dollar figure on what your vehicle is worth now compared to what it was worth before your accident. The process of car insurance claims typically involves a close examination of the car’s condition, the repair quality, the history of the accident, and finally, market research to find out the pre-accident and post-reparation market value of the car.

Moreover, this appraisal is pivotal to enable you to support your claim when you are looking for compensation from an insurance company. An accurate estimate can be challenging to prove the extent of your loss without.

Types of Diminished Value

Understanding the different types of diminished value can help clarify how an appraisal fits into the process:

Immediate Diminished Value:

This is the difference in the market value of the vessel immediately after the accident without any repair being effected.

Inherent Diminished Value:

An accident history loss is the diminution in value of the car for no other reason than now it has an accident history, even if repairs were flawless. The most commonly pursued type of claim falls under the category of inherent diminished value.

Repair-Related Diminished Value:

This type is charged for such a reduction in value due to a substandard repair or because of the presence of non-original parts.

When Is a Diminished Value Appraisal Necessary?

Obtaining a car appraisal for diminished value is worth considering under the following circumstances:

The Accident Was Not Your Fault:

However, if the accident was another driver’s fault, you could potentially claim diminished value from his insurance company. The loss is established with an appraisal.

Your Car Is Relatively New:

With newer vehicles, there is more diminished value because newer vehicles tend to have a higher demand for their market value.

The Vehicle Is High-End or Luxury:

An appraisal is more impactful on a premium vehicle that will encounter a more significant loss in value from the crash.

The Repairs Were Extensive:

Even with professional repairs, a car that has sustained a lot of damage can possibly decrease its value.

Diminished Value Appraisal Has a Wealth of Benefits

Accurate Valuation:

The data-backed professional appraisal is an objective estimate of what your car has lost in value. It can help make your case if insurance companies get involved.

Leverage in Negotiations:

Insurance firms can purely provide low settlements at first. Having an appraisal from a qualified auto damage appraiser is leverage for you to negotiate to get you fair compensation.

Improved Chances of Success:

The stronger the claim with a detailed appraisal, the better your chance of a favourable settlement.

There is more to a diminished value appraisal than the cost of the appraisal.
The cost of getting a diminished value appraisal can vary and is normally between $200 and $500. This may seem like a high expense, but often, this can cheap out if an appraisal results in a higher settlement.

Before you decide if the appraisal is worth it, think about how much value you stand to lose. It’s an investment worth it as long as the diminished value is likely to exceed the cost of the required appraisal.

How to File a Diminished Value Claim After an Accident

The process of claiming diminished value typically involves:

Gathering Evidence:

Requests can be sent for repair invoices, accident reports, and photos of the damage.

Obtaining an Appraisal:

However, we recommend hiring a certified auto damage appraiser who will come up with a diminished value.

Drafting a Demand Letter:

Make a demand letter from the appraisal and supporting documents. Sample templates and expert tips are geared for you in a diminishment value demand letter from Mighty, which can make things less complex and hassle-free for you to send. Mighty’s guide allows car owners to file claims independently and, hence, avoid paying legal fees.

Submitting the Claim:

The demand letter should be sent to the at–fault party’s insurance company to negotiate for fair compensation.

If You Need Evidence: Is a Diminished Value Appraisal Worth It?

Whether to get a diminished value appraisal is a case-by-case decision. Here are some factors to consider:

Severity of Damage: The diminished value might be tiny if your car’s damage was minor and repairs were affordable.

Vehicle Age and Type: The newer and higher end, the more significant the diminished value and the more worthwhile appraisal.

Claim Value: Ask yourself: Is the cost of the appraisal more than the amount of a potential claim? If the anticipated compensation far exceeds the appraisal cost (and it should), then it’s a good investment.

Let us say, your car is worth $30,000 and the diminished value is determined to be 10% off ($3,000), which means you may be getting your money’s worth when you spend $300 for an appraisal.

For those involved in a car accident, a diminished value appraisal of a damaged car can be a good thing. The process is an upfront expense, but the gains frequently exceed costs, especially on newer or higher-end cars with big value losses.

Mighty provides a well-structured diminished value demand letter that can be combined with a professional appraisal to give you your best chance at a settlement for fair value. With Mighty, car owners get step-by-step guidance that offers an easy way to get to the bottom of your claim and take the reins of the process yourself.

If your vehicle has been in an accident, and you have not been informed of the diminished value and do not take steps to pursue it, that means you pay for their mistake on top of yours.