WHEN THE VALUE OF YOUR CAR DECREASES AFTER AN ACCIDENT
Published on by Shawn T. Flaherty
Can You Recover the Lost Value of Your Car?
When you are the victim of a serious automobile accident, you will likely sue for damages
relating to your injuries and/or pain and suffering. Assuming the insurance company does not
declare your vehicle to be a total loss, your automobile insurer will pay for the repairs to your
vehicle. But what about the “diminished value” of your vehicle?
WHAT IS DIMINISHED VALUE?
Assume that, prior to an accident, your vehicle had a fair market value of $45,000. You are then
in a serious accident, which nearly totals your car, but the insurance company decides to repair it.
You receive your vehicle back after repairs are completed, and it looks just as it did before the
accident. The day you receive it back, you decide to trade it in. To your surprise, your
automobile that was just worth $45,000 is now worth $30,000 due to the vehicle being involved
in a serious accident. This is diminished value.
In today’s world, anyone can find out with the click of a button whether a vehicle has been in an
accident by obtaining a Carfax History Report (www.carfax.com). The Carfax History Report
will show all accidents the vehicle was in, and also what the current fair market value is for the
SHOULDN’T YOU BE COMPENSATED?
You have now suffered a financial loss. Virtually all policies of automobile insurance in
Pennsylvania restrict your right of recovery to the actual repair cost of returning the car to
“substantially” the same condition it was in before the accident. These insurance companies use
specific policy language to prevent this sort of claim against themselves.
Pennsylvania law is not clear, however, on whether the other driver’s insurance carrier may be
responsible for reimbursing you the diminished value to your vehicle. The Plaintiff in a claim for
diminished value must first persuade the jury or the fact finder that the vehicle’s value has been
diminished despite the fact that it was “fully” repaired (there are expert witnesses who specialize
in this information for a fee).
Once this fact is proven by the Plaintiff, it is up to the Court to decide whether or not the other
driver’s insurance company will be responsible for paying the Plaintiff the diminished value to
the vehicle. The Supreme Court of Pennsylvania has not clearly decided this issue, so it is not
certain whether diminished value is a proper claim for damages here. We intend to represent
these Plaintiffs and help establish this burden of proof.
THE LAW IS SPLIT
The law is split in other states regarding diminished value. In Georgia, the Supreme Court
specifically recognized diminished value as a proper claim. However, in New Mexico, the
Supreme Court specifically rejects this. The Massachusetts Supreme Court, in Gov’t Emples. Ins.
Co. v. Bloodworth, found that tort principles of recovery clearly apply in these types of
situations, where a Plaintiff should be made “whole.” The Court holds that being compensated
for diminished value is part of becoming “whole.”
Although the Pennsylvania Supreme Court has yet to make a clear decision on diminished value,
there is nothing to lose by making a request for a payment.