Recovering damage to value from a car insurance claim

March 29, 2023 1:39 PM

I live on a hill. After an ice storm in December, a neighbor drove her car up this hill, slid back on the ice and collided with my car and a few others parked on the street, doing considerable body damage. This is now finally fixed after three months; body shop repairs were paid for by her insurance. My question is: If I sell my car, do I lose measurable value from repair work (damage records tied to and recoverable via the car's VIN when selling) and how do I recover this loss from her insurance company, if so?

Note: I'm not trying to be greedy, but rather I have to make a decision on whether to keep this car for the duration or sell it soon, and I would like to maximize its value despite the other driver's recent actions. Thank you in advance for not ascribing motivations unnecessarily, if answering!

posted by They sucked his brains out! to Travel & Transportation (6 answers total)

Best answer: A helpful search term for is "diminished value." Some states don't require insurance companies to recognize it, which is maddening. In general, I'd say that the newer the car, the bigger the deal this is in terms of the value of the car.
Some of the online value calculators (I believe the one on Edmunds.com) ask you about the car's accident history. You could run one query without the accident damage and one with to see what the difference is.
(Don't enter your VIN- just enter make, model, trim level, mileage, etc or the accident damage _may_ be pulled automatically- IDK.)
posted by Larry David Syndrome at 2:01 PM on March 29, 2023

Do you lose value from the repair work: maybe. If the title is listed as "reconstructed" instead of a clean title, it definitely loses value. Most people want a clean title for something that isn't a vintage/collectible car. Some people also are wary of anything that's had major work, even if it's basically fine. Some people are just happy that you did the work and not them. It depends on the exact damage, how it was repaired, and the attitude of the buyer.

Do you recover this from the insurance company: probably not. The insurance company considers you even because they paid for the repairs. If the car had been totaled, you'd have got what they considered a fair value for the car, even if you could have sold it for more to the right buyer. They work off the Blue Book value/depreciation formula they have, not what is in your best interest. This doesn't really apply if it's like, the Batmobile or a '37 Hupmobile in mint condition or something, in which case your insurance should have gone to bat for you for additional compensation.

You can ask your insurance these questions-- in some cases, they are able to get an additional payment from the other insurance for assorted damages but in general if they already paid for the body work you probably got all you were going to get. It is worth asking, though.
posted by blnkfrnk at 2:06 PM on March 29, 2023

The assumptions made by the insurance company don't include the resale value of the car. As far as they're concerned, their responsibility ends at the point where the car is as good as it was before the accident. In an ideal world, those repairs should make no difference to the value, just as driving a brand new car off the dealer's forecourt should make no difference to its value. But in the real world the vehicle history matters, for whatever reason; it's just not the insurer's concern.
posted by pipeski at 2:22 PM on March 29, 2023

I had this explained to me by a lawyer that you are able to pursue a diminished value claim, but that your insurance company will not assist in any way through subrogation since it isn't covered under your own policy (though I guess that's depending on locality). The other party's insurance company will not readily pay up for it, so you will have to sue them on your own.
posted by hwyengr at 2:44 PM on March 29, 2023

As far as they're concerned, their responsibility ends at the point where the car is as good as it was before the accident.

This is flat out incorrect in most states. At fault parties (and hence, insurance companies for those at fault parties) are required to pay diminished value claims when a third party (ie, the OP) makes a claim for diminished value.

All states except Michigan allow for some level of diminished value claim to be filed if the other party is at fault.

Link

This doesn't make the claim easy, nor does it mean that such a claim will result in any significant compensation. However, your claim that insurance companies only include repairs is only, at most, true in some states, for first party claims only (ie, when someone damages their own car and claims on their own insurance).
posted by saeculorum at 2:45 PM on March 29, 2023

Response by poster: This is flat out incorrect in most states

I should clarify that I am in the United States, and that laws may be different where pipeski's profile suggests they live (United Kingdom?). Sounds like diminished value is the legal term to use for going forwards, thanks!
posted by They sucked his brains out! at 3:06 PM on March 29, 2023 [2 favorites]