Diminished Value Claims in North Carolina
Helping Car Accident Victims Seek Financial Compensation
If you or a loved one have been involved in an accident and your motor vehicle is significantly damaged, it is important to understand that seeking compensation for your injuries involves being compensated for the diminished value of your vehicle. As such, if your vehicle has been damaged as a result of someone else’s negligence, the costs of both the repair of your vehicle and the diminished value of the vehicle may be recoverable. This section discusses and explores diminished value claims in North Carolina.
What Are Diminished Value Claims?
Diminished value claims seek to ensure that the owner of the vehicle is compensated for the loss of value to his or her vehicle after an accident. In North Carolina, diminished value claims are calculated by comparing the difference between the fair market value (FMV) of your vehicle before your accident occurred and the depreciated value of your vehicle following the accident and the repair of your vehicle. However, very few people know about diminished value claims or how to make them. As such, it is common for accident victims to fail to assert any demand for compensation arising from their vehicle’s loss of value.
What Is Fair Market Value & How Is It Determined?
The fair market value (FMV) is the amount that a seller and buyer agree upon for a vehicle’s worth. Determining the fair market value is not an exact science and can be a somewhat tedious task, as the value is always disputable. With that being said, it is highly recommended that you receive an appraisal from a disinterested professional and licensed third party. Having a third party appraise the fair market value of your vehicle will help eliminate bias and provide you with more leverage during negotiations with the insurance adjuster. Also, be sure that you get all appraisals in writing to better support your claim.
An appraiser will consider numerous factors when determining the FMV of your vehicle. An appraiser generally considers such factors as:
- The age of your vehicle
- The make and model of your car
- Location and severity of damage to your vehicle
- The cost of repairs
- The quality of repairs done to your vehicle
Appraisers and the companies for which they work maintain records of car sales in your area for comparable vehicles that have not been damaged in an accident. Furthermore, they have expertise in evaluating cosmetic and mechanical effects after your vehicle has been damaged. Taking all this into consideration, the appraiser will be able to compare the value of your vehicle after the accident and the fair market value of your vehicle just before the accident to determine the diminished value. This information will be vital in negotiating your diminished value claim.
Do I Have to Hire an Appraiser?
While hiring an appraiser can be helpful to your claim, their services are often expensive. With that being said, there are several different actions that you can take on your own. Due to diminished value claims being based on the fair market value of your vehicle, you will need to find sale prices on cars that are comparable to yours, but without an accident history. This can be done by looking on sites like Auto Trader and at local car dealerships. Also, you can have your vehicle evaluated at car dealerships for trade-in values once your repairs are complete. Some dealerships may be willing to provide you with an estimate for your vehicle’s value if it had not been in an accident. This can be helpful, as it provides you with the general fair market value of your vehicle before the accident occurred.
Important note: Remember that trade-in values are generally much less than private and sale values, as the dealership will be looking to make a profit upon reselling the vehicle.
What If the Insurance Adjuster & I Cannot Come to an Agreement?
If you and the insurance adjuster cannot reach an agreement, there are several different steps you can take. Pursuant to North Carolina General Statute § 20-279.21, you are entitled to invoke what is known as the appraisal clause. Essentially, by invoking this clause, both you and the insurance company will be required to hire disinterested third-party appraisers who will then try to reach an agreement on the diminished value of your vehicle. If the two appraisers are able to reach an agreement, then both you and the insurance company have 15 days to object. If no objections are made within the 15-day timeframe, the agreement becomes binding.
If you are unable to reach an agreement through invoking the appraisal clause or decide to forgo invoking the clause, you may consider filing a claim against the at-fault driver and their insurance company. In other words, you may file a lawsuit for your diminished value claim. Generally, these claims will be brought in small claims court as they usually will not exceed $10,000. However, if your diminished value is greater than $5,000, you may want to consider speaking with an experienced diminished value or personal injury lawyer in your jurisdiction.
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$1,900,000 Wrongful Death
The at-fault driver failed to reduce speed and collided with our client's vehicle. Our client passed away shortly after the collision.
$900,000 Wrongful Death
Our client was thrown from his motorcycle and was pronounced deceased on the scene.
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Vehicle made a left-hand turn, failing to yield the right of way.
$104,000 Serious Injuries
Client was a passenger in a vehicle that was driving through an intersection when another vehicle ran a stop sign and t-boned the vehicle our client was in.
$104,000 Severe Injury
We were able to not only receive policy limits for our client but were able to negotiate her medical bills and liens to ensure that she was able to keep a good portion of the settlement.
$102,000 Serious Injuries
Elderly client was a passenger in a vehicle that was t-boned in an intersection where a driver failed to yield the right of way.