Auto accident insurance question and diminished value
April 23, 2014 3:04 PM   Subscribe

Auto accident insurance question and diminished value


> US Northeast

> Basically brand new car was rear ended, other driver 100% at fault. No injuries. Heavy damage to car.

> Car repaired just fine, repairs paid for entirely by other driver's insurance company (Company "A"), no out of pocket expenses incurred by us.

> The car is owned not leased.

> Subsequent to repairs we put in a claim with Company A for "diminished value" (this is the inherent loss of value incurred when a car has been in an accident, i.e. how much less a car is worth that has been in an accident and repaired compared with the same car that has not been in an accident), supported by an appraisal we had done for the amount of the diminished value.

> Company A told us that the other driver's policy coverage limit would be exceeded by the combination of repairs + diminished value. They offered a settlement that would bring the total payout to the policy limit...but this only equals about 20% of our diminished value claim. We have not yet responded to the settlement offer.

> We put in a claim with our insurance company (Company "B") for the difference. Claims adjuster told us our coverage would not cover diminished value. Our agent even told us there was no such thing as diminished value, before quickly changing their story once I rattled off some facts (thanks, internet!). However they still said that Company B could not assist.

So, what do we do now? Can we pursue the matter with Company B with any chance of success? Is company A off the hook since their policy holder's property damage liability limit has been reached? Should we sue the other driver? Should we suck it up and take the settlement? It's not a huge amount of money at stake, but we feel we should be made whole considering we were 100% not at fault. Thank you!
posted by anonymous to Travel & Transportation (3 answers total)
IAAL, and though IANYL, I have been working in the insurance industry and/or related litigation since 2009.

I have never, ever heard of an auto policy that provides coverage for "diminished value". Policies simply aren't written that way. There are a very few states that have imposed such an obligation upon insurers via court edict, but I don't think any of them are in the northeast (Georgia and Kansas come to mind). I think CT requires third-party carriers to cover DV when their insureds are at fault, but first-party collision claims don't cover it.

In short: if you want a straight answer, you're going to need to consult a local attorney, but do not be at all surprised if you're out of luck. You're looking for something that only a minority of states do, and even ones that do it don't necessarily do it in a way that helps you.
posted by valkyryn at 3:21 PM on April 23, 2014 [1 favorite]

I wouldn't trust the company B claims adjuster on this, though they may well turn out to be giving you an accurate picture.

First step, look into state law (and your policy). If there is local law about DV that seems like it might apply, then talk to an "insurance agent" who is working for you, ie a lawyer. They'll know the system and cut through any insurance company bullshit.
The lawyer will also be able to advise about what would be involved in bypassing B and going to the at-fault driver directly.
posted by anonymisc at 3:23 PM on April 23, 2014

The lawyer will also be able to advise about what would be involved in bypassing B and going to the at-fault driver directly.

If you signed a release with Company A, that may no longer be possible. Still, the only way to find out is to talk to a local attorney. Which you should probably have been doing from the outset, but that ship has sailed.
posted by valkyryn at 3:30 PM on April 23, 2014

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