Car accidents have a lot of effects that you have to deal with. If you were fortunate in that you only suffered mild injuries or no injuries, you might still have vehicle damage to contend with. Getting your repairs taken care of can be expensive, but the defendant’s car insurance should cover it. However, that might not be the end of your claims if your car ends up worth less money even after the repairs.
A diminished value claim pays you for the difference in value after the repairs are completed on your car. Simply by having been in an accident, your car is often worth less, and even with repairs and replaced parts, the vehicle could have a lower value than it started with. That reduced value is something you can account for in a car accident claim in Maryland.
Call our Maryland car accident attorneys at Rice Law for a free case review by dialing (410) 694-7291.
What is a Diminished Value Claim for Vehicle Damage in Maryland?
When your car is involved in an accident, it goes down in value. In a car accident claim, the plaintiff (the victim) files for damages to cover any of the expenses and harms that they faced because of the defendan’s (the at-fault driver’s) mistakes on the road. This can include a wide variety of harms, including medical bills, lost wages, vehicle damage, pain and suffering, and even this diminished value, all with the goal of setting things back to how they were before the crash.
In many cases, a damaged vehicle can be repaired in such a way that it is functionally as good as it was before the crash. In this case, the only thing the defendant will have to pay for is those repairs. That might mean covering the cost of parts, labor, paint, and other materials and expenses. However, repairs might not be perfect, and even if they are, the car will often be worth less than it was simply because it was involved in a crash.
A diminished value claim lets you account for this and get reimbursed for the reduction in value, sometimes called a “diminution” in value.
How Do You Submit a Diminished Value Claim?
Even the best repairs cannot erase an accident from a car’s vehicle report, leading many victims to file diminished value claims. Because Maryland is an at-fault state for auto accidents, meaning the negligent driver is responsible for the victim’s damages, you can file a diminished value claim against the other driver’s insurance.
Our attorneys can help you submit all the information the insurance company will need to assess the diminished value of your vehicle, such as repair documents, the police report, damage photos, and pre- and post-accident appraisals. We can also write and send a demand letter demanding compensation for the diminished value of your vehicle.
Why Are Cars That Were Involved in a Crash Diminished in Value?
If a car is in an accident, people will be less interested in buying it. Even when repairs are perfect, it is hard to know what damage might be underneath the repaired body and a new coat of paint, so buyers typically just value vehicles at a lower price if they were involved in a crash.
Carfax and other history reports always include information about previous accidents, and buyers and dealers take that into account when valuing a vehicle. So, even if the accident wasn’t your fault, your car is likely going to be worth less after the crash, even if it has been repaired.
Can You Calculate the Diminished Value of Your Car?
Knowing how much a car is worth is often difficult, and many people just trust dealerships to have a better idea of their car’s value. However, it is important to look into how much your car’s diminished value claim could be worth, which inevitably means looking into how much your car should be worth before and after the accident.
Victims can and should calculate a vehicle’s diminished value before accepting any settlement. The diminished value claim itself will be for the difference in value between what your car was worth and what it is now worth after the crash. This value is ultimately added on top of other costs, like the cost of repairs and labor.
How Do You Calculate a Car’s Diminished Value?
One of the main calculation methods used to find this value is known as the “17c” formula, named after an insurance form, which our lawyers have experience using.
Original Value
To calculate this “diminution in value,” you have to start with the original value of your car before the accident. That means consulting the Kelley Blue Book or a similar valuation guide to determine your car’s value based on the specific make, model, year, features, mileage, and other details. When looking at this value, use the condition your car was in before the accident.
From there, we take 10% (multiply that original value by 0.10). Essentially, we start by assuming your car’s value dropped by 10% at most, and then we adjust that down based on the damage your car sustained and its mileage.
Once you have that 10% starting value, we need to choose a “damage modifier” and a “mileage modifier.”
Damage Modifier
A damage modifier of 1.00 indicates very severe damage to the structure of the car and would keep you up to a maximum 10% diminution in value by multiplying that number by 1. Typically, this value is set in increments of 0.25, with 0.50 being “moderate” and 0.00 being no damage at all.
Our lawyers will multiply your original 10% by this multiplier to get your diminished value so far.
Mileage Multiplier
The original value of your car should already have taken mileage into account, but it is common practice to do so again at this stage. The assumption here is that when an old, heavily used car gets damaged, it doesn’t affect the price as much as when a brand-new, low-mileage car is damaged.
The mileage multiplier starts at 1.00 for a car with under 20,000 miles, and the multiplier drops by 0.20 for every 20,000 additional miles. So, for example, a car with around 20,000 to 40,000 miles on it will use a multiplier of 0.80.
Once you multiply your total so far by this second multiplier, you will get the total estimated diminished value to include in your claim.
Alternative Method
While that calculation is what insurance companies often use, lawyers and courts might be more straightforward. If you want to know the diminished value, you can simply check the value of the vehicle before the crash and after the crash by looking at its Kelley Blue Book value, then just subtracting the two.
Car values take into account the damage done in a crash, so you can just subtract the new post-crash value from the old pre-crash value and use that number as an estimate for how much to claim. This also accounts for cases where the car’s value is reduced by more than 10%, something that the 17c calculation ignores or assumes can’t happen.
FAQs About Diminished Value Claims in Maryland
What Evidence Do You Need to Prove a Diminished Value Claim?
The following evidence is often useful in proving and recovering damages in diminished value claims:
- Photos of vehicle damage before repairs
- Photos of vehicle damage after repairs
- Police report
- Vehicle history report
- Inspection and maintenance records
- Pre- and post-accident appraisals
- Repair invoices and receipts
How Long Do You Have to Recover Your Vehicle’s Diminished Value?
Maryland gives plaintiffs three years to recover compensation for a vehicle’s diminished value after a crash, as well as any other damages they may incur from injuries or emotional distress. Failing to bring your claim within that timeframe will bar you from recovering any compensation whatsoever.
Does Fault Matter in a Diminished Value Claim?
Because Maryland is an at-fault state for car crashes, fault matters in diminished value claims. If you cannot present compelling evidence of the other driver’s negligence or recklessness, their insurance company might refuse to cover all damages, including those for the car’s decreased value. We are very familiar with Maryland’s pure contributory fault laws and the best tactics for avoiding their negative effects.
Can You File a Diminished Value Claim if You’re Uninsured in Maryland?
Fortunately for uninsured drivers whose cars sustain severe damage in accidents, Maryland is not a “no pay, no play” state and doesn’t block drivers who are uninsured from seeking compensation for any of their damages, including for a vehicle’s diminished value.
Do You Need a Lawyer for a Diminished Value Claim?
The negligent driver’s insurance may be unwilling to offer a fair sum for your injuries, medical damages, and lost wages, let alone your vehicle’s diminished value. Our attorneys can aggressively advocate for your fair recovery of all damages so you don’t have to cover any costs yourself.
Call Our Maryland Car Accident Attorneys for Help
If you were involved in a crash, call Rice Law at (410) 694-7291 for a free case review with our Baltimore accident lawyers.