For many people, their motor vehicles will never be the same after an accident. Even after extensive repair work is done, some vehicles will never match their prior performance or fetch the same sale price they would have prior to a crash. Under these circumstances, you could be entitled to damages for the diminished value of your vehicle.
The way this value is calculated is often in dispute. Insurance companies rely on a formula referred to as the South Carolina diminished car accident value calculator, which does not always lead to a fair outcome for motorists. A car accident lawyer serving South Carolina could help you develop your diminished value case.
Diminished Value Can Take Many Forms
The term “diminished value” refers to the reduced value of a motor vehicle due to its accident history. The value of a car is diminished when its sale value is lessened despite it being repaired to its optimal value.
There are different types of diminished value. The ways the value of your vehicle could be diminished might vary, but the methods insurance companies use to calculate this value are largely the same.
Inherent Diminished Value
Inherent diminished value occurs when a car loses value for being involved in an accident. The price that consumers are willing to pay for these vehicles naturally falls when a buyer learns that a vehicle was previously in an accident. With inherent diminished value, this loss of value occurs even though there is nothing functionally wrong with the vehicle.
Repair-Related Diminished Value
The value of a vehicle can become diminished not only from an accident but also from a faulty repair after a crash. When these faulty repairs result in additional cosmetic damage or structural issues, it can lower the value of the vehicle.
Immediate Diminished Value
Immediate diminished value represents the loss in value to a vehicle after a collision. This type of diminished value occurs before the owner of the vehicle has an opportunity to make any repairs.
The value of a vehicle is mostly diminished under these circumstances.
How Insurance Companies Calculate Diminished Value
Most insurance companies determine the diminished value of a motor vehicle using a calculation known as the 17c diminished value formula. This formula is used in South Carolina and in many other states.
Setting the Base Value of the Vehicle
The first step in calculating diminished value involves identifying the base value of the vehicle. This is done by relying on resources like Kelley Blue Book or the National Association of Automobile Dealers (NADA) guidelines. These resources provide a base value of a vehicle depending on the make, model, year, and mileage.
Applying the Loss Cap
After setting the base value of the vehicle, insurance companies will apply something known as the 10 percent loss cap. This cap is an arbitrary limit on the vehicle’s loss of value.
With this cap, the insurance company will reduce the value of the vehicle by no more than 10 percent. This limited reduction in the base value is used regardless of the extent of the damage.
Applying a Damage Multiplier
The third step involves reducing the diminished value claim depending on how severe the damage to the vehicle is. Minor damage could see the claim reduced dramatically.
Adjusting for Mileage
Finally, the diminished value damages are reduced further based on the mileage of the vehicle. For newer vehicles, this formula might reduce the amount of the settlement more.
When it comes to older vehicles, the mileage calculation could make a significant difference.
Why You Should Consider a Third-Party Valuation of Your Vehicle
When dealing with the insurance company, you can count on the adjuster to imply that an appraisal using the 17c diminished value formula is mandatory. Instead, these calculations are only one way to determine the diminished value of your motor vehicle. That is why it is best in these cases to obtain a valuation from an independent third party before you attempt to negotiate with the insurance company.
It is one thing to say that you do not believe the insurance estimate of your vehicle’s diminished value is accurate. It is another to offer your own estimate. By making a case for what your vehicle is worth, it could improve your chances of securing fair compensation for its diminished value.
You are under no obligation to accept the insurance company evaluation of your vehicle. The formula used by insurance companies frequently results in low valuations, and an attorney from our firm could help negotiate a fair outcome for your case.
Talk to Us About Your South Carolina Diminished Value Case Today
Understanding South Carolina diminished car accident value calculations is helpful if you believe your vehicle has lost substantial value after an accident.
With the help of George Sink, P.A. Injury Lawyers, you could get the monetary damages you are entitled to. Call (888) 612-7001 for a free consultation today.