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I was on vacation in Sea Island, GA and was in an accident.
I won't go into the details but in essence a 90 year old man backed up into my car. He has State Farm insurance. My insurance is Firemans.

The damage appears to be limited to bumper/headlights but it is an expensive car.

How do I address/negotiate the issue of devaluation/diminished value since my car was purchased new?

Thanks in advance.

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Well man, I think I know how it feels ... tough luck [didn't FWF tell you to buy a used inexpensive car ? ]. I don't think you can get much from insurance (either old man's or yours) in a way of compensation for difference between the car that was and was not in an accident (yes, CARFAX will likely get a record of this). The option that you do have is to take your car to a repair shop of your choice and have the repair job done to your satisfaction (which you can define as "the car should look as if it hadn't been in an accident" -- something nearly impossible to achieve if you ask a pro). Of course, you can try suing old man .. but I'm not sure it's worth time and money and I'm even less sure about the likelihood of success. Think of it this way -- at least it's the insurance of a person responsible for the damage that's paying ... it could have been worse.

I have seen ads on TV by one or more of the insurance companies that claim the will give you a new car (not sure what that means) if your car is less than a certain number of years.

I agree that even beyond repairs, a car in an accident is likely to have lower retail value (CarFax and CLUE will have information about the claim and accident, and even an un-trained eye might be able to see that the repair was not well done).

You are entitled to payment from the other party's insurance company to cover the diminished value of your vehicle following repair. This is not to cover faulty repair but rather to cover inherent loss in vehicle value due to the fact that it has been in an accident and was repaired. I was recently rear-ended and my 2005 maxima was pushed into the vehicle in front of me (stopped at traffic light). The repairs were ~11k and I negotiated $3750 in diminished value from the at-fault party's insurance company.

Keep in mind, this is only applicable in cases where a 3rd party is at fault and their insurance company is paying. In cases where you cause an accident, your insurance policy likely has a stipulation that diminished value is not covered for your vehicle. But in the 3rd party case, they are obligated to make you "whole" as if the accident had not happened.

The tricky part is determining the amount of diminished value. I recommend finding a local diminished value expert who will provide you with a diminished value appraisal for a few hundred dollars. You can then submit this to the insurance company and begin negotiations. Search google for more info. If you're in Texas, I can recommend an diminished value expert.

ask the Body Shop to only use OEM parts

tubs said: You are entitled to payment from the other party's insurance company to cover the diminished value of your vehicle following repair. This is not to cover faulty repair but rather to cover inherent loss in vehicle value due to the fact that it has been in an accident and was repaired. I was recently rear-ended and my 2005 maxima was pushed into the vehicle in front of me (stopped at traffic light). The repairs were ~11k and I negotiated $3750 in diminished value from the at-fault party's insurance company.This varies state to state (see this Bankrate article that briefly explains some of the issues). In a lot of states you cannot collect diminution of value. In Georgia, you ABSOLUTELY WILL COLLECT IT (see below)

Keep in mind, this is only applicable in cases where a 3rd party is at fault and their insurance company is paying. In cases where you cause an accident, your insurance policy likely has a stipulation that diminished value is not covered for your vehicle. But in the 3rd party case, they are obligated to make you "whole" as if the accident had not happened.This is NOT the law in Georgia or in quite a few other states. Ever since '01 when the Georgia Supreme Court decided State Farm Mutual Automobile Insurance Company v. Mabry, 274 Ga. 498, ALL insurance companies paying out Georgia auto claims are absolutely and unequivocally REQUIRED to compensate the claimants for the diminution of value of their vehicles. Under Georgia law it DOES NOT MATTER whether a 3rd party is at fault or whether you are at fault and are going through your own company under the comprehensive/collision coverage -- either way the insurance company is required to calculate your vehicle's diminution of value.

The State Farm case above resulted in an enormous settlement. As part of the settlement, parties agreed to use the so-called 17C formula to divvy up the settlement proceeds. Ever since then, insurance companies in Georgia have been attempting to use the 17C formula to calculate the diminished value claims in all cases, which typically results in very low payouts. Under your insurance contract you have an absolute right to challenge the insurance company's calculations, including its use of the 17C formula. If the insurance company won't budge, you should consider getting a diminished value appraisal (you'll have to pay $150-$250 out of pocket for it if you use a physical appraiser; it's a lot less if you use an online appraisal but it won't carry as much weight with the insurance company) at which point the insurance company will have the option of either hiring its own appraiser or just negotiating with you for a higher amount.

P.S.
Here's a link to a website that points out the flaws associated with the use of the 17C formula.

Squeezer99 said: ask the Body Shop to only use OEM partsYou can ask for whatever you want but if the car is more than about 3 years old, unless you are dealing with a company like Chubb, your request will be denied.

The way that I've previously forced insurance companies to use OEM parts on my car, however, is by pointing out that my car carries a manufacturer's standard rust perforation warranty good until about 100K miles. So, the use of an aftermarket part on my car would most likely void that warranty, which would increase the diminished value payout that the insurance company would be required to make, resulting in a net loss for the insurance company. In other words, the savings that they would get from the use of after-market parts would be more than offset by the increased diminished value payout.

I also involved in a car accident rencently. My new 2008 Nissan Altima (I bought it 2 months ago) was hit when the other party made a quick right turn on a double lane. I'm also wondering what kind of compensation should be made other that repairing my car by the other party? I live in Houston TX, can anyone recommend an diminished value expert? Thanks.

Along these lines, what is the best way to negotiate a settlement for a car that was totalled? What is the starting point to start the negotiations, and what kind of factors can affect the settlement?

I'm looking on Edmunds.com at our 2001 Oldsmobile Alero that was recently hit and totalled. It estimates:
Trade-In national base: $3457
Private Party national base: $4357
Dealer Retail national base: $5239

I'm thinking that I want to come in asking for at least the dealer retail price to start the negotiation, cuz I know they are going to try to pay as little as possible.

Has anybody had success with increasing the settlement because of recent money spent on the car (we spent over $800 on it about 6 weeks ago)?

They'll pay you dealer retail, plus taxes and whatever plate fees your state has. I had this happen to me and the price they gave me was more than fair, I was actually able to buy a comparable car for less. Your $800 that you just put into repairs only brought the car up to what dealer retail would be. If the car that got totalled needed $800 in repairs, they would deduct that from the amount you would receive as payment. Basically they are paying you what it would cost to replace a fully working car that doesn't need any repairs...since that is what you had that got totalled.



cheezedawg said: Along these lines, what is the best way to negotiate a settlement for a car that was totalled? What is the starting point to start the negotiations, and what kind of factors can affect the settlement?

I'm looking on Edmunds.com at our 2001 Oldsmobile Alero that was recently hit and totalled. It estimates:
Trade-In national base: $3457
Private Party national base: $4357
Dealer Retail national base: $5239

I'm thinking that I want to come in asking for at least the dealer retail price to start the negotiation, cuz I know they are going to try to pay as little as possible.

Has anybody had success with increasing the settlement because of recent money spent on the car (we spent over $800 on it about 6 weeks ago)?

Hi. You do have an option. It is called diminished value and GA laws do require his insurance company and/or yours to pay out on this. Just look it up online. There are lots of companies that will help you pursue this. I am about to do the same since my brand new Ridgeline was just backed into this weekend. BWB



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