Understanding Diminished Value Claims After a Vehicle Accident
If your car was recently repaired after an accident due to another person’s fault, there’s a good chance it’s still costing you money, even with a flawless repair job. In South Carolina, a vehicle with an accident on its history report is simply worth less to buyers and dealers than an identical car with a clean title. Thankfully, state law recognizes your right to recover that loss and can make up the difference through a diminished value claim. At The Law Office of Mark C. Tanenbaum, P.A., our Charleston car accident lawyers are here to help you understand what your claim is worth and to fight back if the insurance company lowballs you.
What is a Diminished Value Claim?
A vehicle’s diminished value describes the loss in a car’s resale value following an accident. Since an accident can reduce your car’s trade-in or resale value, you will have less money when purchasing a new vehicle. A diminished value claim can allow you to pursue compensation to fill in the gap. When a negligent driver hits your vehicle, you may pursue a diminished value claim against them and their insurer.
A diminished value claim doesn’t make sense for all vehicles, but it is usually recommended with newer vehicles with moderate-to-severe damage. In South Carolina, a diminished value claim will be filed through the at-fault driver’s property damage liability insurance, with a statutory minimum of $25,000. You can file against the at-fault driver’s coverage for both repair costs and diminished value.
How Diminished Value is Calculated
Insurers often use some version of the 17c formula, which:
- Establishes the vehicle’s pre-accident value
- Applies a damage severity multiplier (0 to 1) based on how bad the damage is
- Applies a mileage multiplier (higher mileage=lower adjustment)
- Applies a 10% cap to the vehicle’s pre-loss value
The formula is controversial, with many appraisers and courts considering it to lowball claimants, so independent appraisals often come back higher. Leased or financed vehicles can complicate matters, so it is critical that you speak with our Charleston car accident attorneys if this pertains to you.
Filing a Diminished Value Claim in Charleston, SC
The following steps should be taken in pursuing a diminished value claim:
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Keep all documentation related to your vehicle repair, including invoices, parts used, and timestamped photos of your vehicle’s post-accident condition, including wide angles and close-ups of the damage.
- Get an independent diminished value appraisal: Since the 17c formula is controversial among appraisers, don’t rely solely on insurance’s number. Third-party appraisers (and even dealership trade-in quotes) can support a higher claim.
- Gather comparable sales data: Gather data from similar vehicles with and without accident history (Kelley Blue Book, NADA Guides, or comparable local listings) to demonstrate the real market gap.
- Submit a demand letter to the at-fault driver’s insurer with your appraisal, repair records, and vehicle history report.
- Negotiate: When initial offers are low, be prepared to provide evidence to support a higher amount. While you can pursue a diminished value claim on your own, legal representation can help you obtain a fair payout.
- Consider arbitration or small claims court if the insurer won’t budge and the amount you are seeking justifies it. Arbitration for disputed property damage liability claims can be pursued under SC Code §38-77-730.
Reach Out to Our Charleston Car Accident Attorneys At Your Earliest Opportunity
If you have been involved in an accident that was not your fault, don’t leave money on the table. You may be entitled to thousands of dollars in diminished value compensation, separate from your repair costs. Understanding diminished value calculations will allow you to understand what your claim is worth and protect your rights. At The Law Office of Mark C. Tanenbaum, P.A., our legal professionals can review valuation reports and negotiate directly with insurers to help you secure fair compensation. To schedule your free consultation with one of our Charleston car accident lawyers, contact us online or by calling (843) 577-5100 today.