Vehicle is in MA: XLE, AWD, Leather Seats, 83,000 miles, bought brand new, excellent condition. Adjuster has come, taken pictures, and left. No talk of “totaling” the vehicle. Going to a shop next week. Assuming it’s put up on a lift and there’s no evidence of Unibody damage, and thus it gets “repaired”, how does one calculate and recover a “Depreciated Value” payment from an Insurance Company?
The offending party was driving for Uber, so a secondary Insurance Company is handling this, as the person’s Primary Insurance Company immediately bowed out. Not sure if that will matter one way or the other…
Is this person asking for your help ? And I doubt if an unknown opinion from the web will be of any help . The thing to do is just wait until all is done . The vehicle will be either repaired or totaled and after that the owner should talk to their carrier about the diminished value for proper guidance.
I agree with @VOLVO_V70 in that your sister has to wait, but there’s no harm in talking about it. The wall of worry is whether it gets totaled, and then what the payment is. If totaled, the payout should be for an identical Highlander on a dealers lot in MA. If not totaled, the wall continues until the SUV is returned. If it drives fine, then it’s done. If not, your sister should not accept delivery.
This really piqued my attention, as I have long been curious about how the so-called “insurance policy” offered by Uber and Lyft really work when one of their “independent contractor” drivers is involved in an accident. I am very well aware of the fact that regular car insurance does not cover any commercial use of the vehicle, including driving for so-called “ride-sharing services”.
In fact, the last time I was in a car accident, even though the other driver was clearly at fault, their insurance company asked what I was using the vehicle for, if there were any other people in the vehicle, etc. In fact, I was driving home from grocery shopping, and there was no one else with me. From the way they were asking the questions, it sounded like they were looking for any excuse possible to weasel out of paying.
It’s an established legal principle. Think about it, suppose you’re looking for a Brand X Model Y car, and two similar age and mileage Model Y’s are available nearby. One has a clean Carfax, one shows a previous accident. Even if the one with prior damage has been repaired and looks no different than any other used Model Y, which one are you going to buy if the price is similar?
Of course, you’d happily buy the crashed and repaired Model Y, if the price is right, meaning a certain amount discounted from the clean book value. That “certain amount” is the diminished value, and it is definitely an economic loss which the at-fault driver’s insurance would pay for.
Yeah, I realize you have to wait for Insurance Companies to work their “magic”. The question was about “Depreciated Value” to see if anybody had any luck (first-hand experience) prosecuting that.
Here’s what I told her I’d be doing (if they total it):
She paid $36,000 for this vehicle brand new. As a frame of reference, my vehicles end up costing me $2000 or less per year (gross cost) after I drive them 222,222 miles minimum. For example, my 2011 Equinox V6 LT was purchased for $20,700 out-the-door. That was after all rebates, my GM Dollars, etc. It’s about to turn 140,000 miles. In January I’ll hit 9 years with it, so my gross cost will be $2300. Early 2021 I’ll be under my target minimum of $2000/year. I consider that an acceptable gross cost/year.
Kbb says Private Party number (for the Highlander) is $22k-$24k.
I say - an acceptable cost/year (for this Highlander) would be $3,000/year. So I would want $36,000-$9,000=$27,000 as a payout, keeping in mind of NOT being at fault, AND aggravation factor AND increased costs (now) associated with purchasing the replacement vehicle.
So - if it gets totaled, I’m thinking it could come down to a “window” of $5k-$7k that may need to be litigated, unfortunately.
Now - if it doesn’t get totaled, then we have the issue of “Depreciated Value”, but in NO WAY should my sister be financially “injured” here for an accident that wasn’t her fault! The offending party is lucky there are no medical bills. Just get her back to where she was and the offending party can worry about paying for it over the next 6 years…
LOL! I used to say “200,000”, but I always blew right by that. So I settled on “222,222” - the last time I’d see every digit the same number on the odometer! I call it “The 62 Club”! LOL! So far, every new vehicle I’ve ever owned has been “inducted”. Most recent “inductee” was my ‘02 Impala, which will turn 226,000 miles next week.
I’d love to take one to 333,333 (and institute “The 63 Club”), but it’s really not possible since the vehicles move to “secondary” status, reducing their miles/year to too small a number (~10,000-12,000/yr) … AND at “advanced age” at that point, of course.
Good luck.
Doesn’t this car have collision coverage?
Here’s my experience- only the car owner’s collision coverage has any real chance of recovering replacement value without huge battle. And that’s if they have that option in their policy. Most of the time you get something between blue book and wholesale value. In my limited experience, recovering replacement value from the other guy’s insurance is going to require litigation. And you’re over small claims limitations in most states. That means lawyers and higher courts…
I posted previously about winning diminished value compensation. Used exactly the argument mentioned above regarding otherwise identical cars but one had been damaged and repaired. The judge agreed and asked how the value was derived. Seemed like a reasonable amount. Pondered for a moment and awarded it…
I showed this thread to my wife, the accident lawyer. She said she typically gets about $1500 - $3000 in diminished value recovery on a 3-4 year old car with significant damage. But she does this stuff everyday. She said if she goes up against a reluctant insurer who doesn’t know what a PITA she is, she’ll just tell the defense attorney " I think I’ll send my client for an MRI of the neck".
Not over the max for litigation in MA. It’s $7,000, but unlimited for property damage caused by motor vehicle, so no lawyer necessary.
And yes, of course she has Collision on her vehicle, but that’s irrelevant here. This is ALL through the offending party’s Insurance Company. She’s NOT going to be dealing with her Insurance Company AT ALL. Period. If it goes to Court, the offending party and their Insurance Company will have to answer to the Complaint … NOT my sister’s Insurer.
I had told my sister about hanging the threat of medical claims over their heads to get them to comply.
I really don’t know how you establish the “Diminished Value” number, though. It’s kind of a hedge number against future issues resulting from the accident. The way negotiation works, I’d expect the Insurance Company to lowball her at $2000, so I’d be looking for $7,000 and settling in the middle.
Why not advise your sister to retain an attorney on a contingency basis for her? Won’t cost her anything, and she’ll come out ahead. I asked my wife what the scientific basis to negotiate diminished value is. She says there is none, and it’s mostly a function of how much the defense attorney wants to get rid of you.
