What Are Diminished Value Claims in California?
A diminished value claim in California allows vehicle owners to recover compensation for the decreased market value of their cars after a crash. California, which follows an at-fault system, allows you to file this type of claim against the driver responsible for causing the accident.
- What Does Diminished Value Mean in a Car Accident Claim?
- Who Can File a Diminished Value Claim in California?
- What Types of Diminished Value Claims Exist?
- What Is California’s Statute of Limitations for Diminished Value Claims?
- When Should You Hire a Lawyer for a Diminished Value Claim?
- Injured in a Car Accident? Get a Free Case Review Today
What Does Diminished Value Mean in a Car Accident Claim?
Chances are that you already know what a “diminished value claim” is, even if you’ve never heard the term before.
Picture this: You’ve found the perfect car, only to find out it was involved in an accident a year ago. Even if it has been repaired and looks as good as new, you might think twice about buying it. Maybe the damage is worse than it seems, or the repairs won’t last. You may view a repaired vehicle as a riskier investment, making you less willing to pay the full price.
Such doubts mean buyers will most likely offer less cash for a vehicle previously involved in a crash. This reduction in a vehicle’s worth after an accident is termed its “diminished value.”
If your car has been involved in an accident in California and is fully repaired to its pre-accident condition, it is still not guaranteed to hold its former value.
Who Can File a Diminished Value Claim in California?
If the other driver is at fault for your accident, you can file a diminished value claim against them and their insurance company in California. This compensation covers vehicle repairs and the hidden cost of its lost value.
California follows the pure comparative negligence rule when determining fault for an accident. Under this system, you can still recover compensation for damages even if you are partially at fault for the accident. However, your compensation will be reduced in proportion to your share of the fault. Thus, in a diminished value claim, the amount of decreased market value you recover will be reduced by your portion of the blame.
Some situations may make a diminished value claim in California more worthwhile, such as the following:
- Your car is relatively new
- Your car had a high market value
- Your vehicle has sustained significant damage
Diminished value claims are typically not an option in claims filed with your own insurer unless your policy explicitly allows them.
What Types of Diminished Value Claims Exist?
Following an accident in California, your car’s value can decline in three distinct ways: inherent diminished value, immediate diminished value, and repair-related diminished value.
Depending on the stage of your car accident case, one or more of these options may be available.
Inherent Diminished Value
Inherent diminished value is the most common type of diminished value claim, and it is all about perception. Even if your car is fully restored, there will still be some concerns surrounding its involvement in an accident. Dealerships and potential buyers will question your car’s reliability simply because it appears on accident reports. This skepticism leads to lower offers, even when the damage is minor or purely cosmetic.
This concept differs from depreciation, which is related to normal wear and tear. Diminished value is the market value lost due to a vehicle accident.
Immediate Diminished Value
Immediate diminished value is the loss in your vehicle’s value right after the accident before you make any repairs. Before the accident, suppose your car was worth $20,000 on the auto market. After the accident, your vehicle won’t be worth $20,000 anymore. This value is reduced to reflect the immediate impact of the crash.
Repair-Related Diminished Value
After an accident, you also have the option to recover damages for your vehicle’s repair-related diminished value. Many auto repair shops, particularly those used by inexpensive insurers, may employ corner-cutting techniques, use aftermarket parts, or do shoddy paintwork on the damaged part.
Even though these repairs may be good enough to make the car operational, safe, and reliable, they diminish its value.
What Is California’s Statute of Limitations for Diminished Value Claims?
A diminished value claim falls under California’s statute of limitations for property damage claims. Thus, under California Code of Civil Procedure Section 340, you must file a diminished value claim within three years of the accident date. However, note that these deadlines don’t apply to government entities. If your vehicle sustains damage in a collision with a government vehicle, you have one year to file a claim for property damage in California.
If you try to file a diminished value claim in California after the deadline passes, the court will likely dismiss your case. Therefore, you won’t be able to recover any compensation, even if your claim is valid.
When Should You Hire a Lawyer for a Diminished Value Claim?
Filing a diminished value claim might seem straightforward. However, this process can become complicated, especially if you are injured or are dealing with reluctant insurers. While not every claim for diminished value in California requires legal assistance, hiring an experienced car accident lawyer can make a difference for you.
Work with our personal injury legal team in any of the following circumstances:
- Your claim is denied: If your insurance provider denies your diminished value claim, your attorney can help you fight back.
- You sustained injuries: There’s no need to battle insurance companies on your own while dealing with painful injuries. Let our car accident attorneys handle the legal details for you.
- You receive a lowball offer: If the insurance company undervalues your claim, an experienced attorney can negotiate a better settlement for you.
- Liability is disputed: If the other party and their insurance company dispute liability, contact a lawyer to help you prove your case.
An experienced lawyer can guide you through the diminished value claim process, protecting your rights and interests at every step.
Injured in a Car Accident? Get a Free Case Review Today
At Cutter Law, we understand that a car accident affects many aspects of your life, including your car’s value and the ability to sell it. Our experienced legal team is committed to helping you recover full compensation for all your damages, including medical bills, lost wages, pain and suffering, property damages, and the diminished value of your car.
Don’t let insurance companies undervalue your claim. Our experienced Sacramento car accident lawyers will fight for every dollar you deserve. Contact us today for a free case review.
Brooks has a long-established, respected reputation as a skilled trial attorney and a record of proven success.
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