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WHEN THE VALUE OF YOUR CAR DECREASES AFTER AN ACCIDENT

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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

vehicle.

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.

About Shawn T. Flaherty

Shawn T. Flaherty, Esq. is the founding partner of Flaherty Fardo, LLC. His efforts are focused in Pennsylvania personal injury law and business litigation. He is a former Pennsylvania State Representative for the 30th Legislative District of Pennsylvania.

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