| has abstract
| - Diminished value or diminution in value are the terms generally used to describe the loss in a property's market value after it was damaged in an accident and repaired. Diminished value is most often associated with automobiles but it is applicable to other property of value including real estate or collectibles such as jewelry and artwork. If a property was damaged and repair failed to restore it to its original market value then said property has suffered diminished value. Unlike depreciation, which is an anticipated and predictable loss in value over time, ‘Inherent Diminished Value’ is a loss in value due to a specific, sudden and unexpected negative occurrence. Diminished value of an automobile following an accident may occur in one of two ways (or a combination thereof): (1) Inherent diminished value (2) Repair-related diminished value Inherent Diminished Value assumes proper repair has been completed and is defined as the amount by which the market value of the repaired vehicle is less than the market value of the same vehicle before the accident. Almost every vehicle that experiences an accident suffers a certain amount of Inherent Diminished Value. Repair-related Diminished Value is the loss of market value due to improper repair of the vehicle. This type of diminished value is rare. Usually, a vehicle with frame or structural damage cannot be resold as a "certified pre-owned vehicle." Frame damage results in high amounts of Inherent Diminished Value. While some may claim Diminished Value is subjective and based upon perception or speculation, the old adage "perception becomes reality' applies and as such Diminution in Value is real simply because, for the most part, no reasonable and prudent person is willing to pay the same price for a vehicle with a history of damage as they would for one never having been damaged. Retailers often offer discounts for scratches and dents on appliances, electronics and dented canned goods; it is, therefore, reasonable that the value of a damaged motor vehicle will suffer a lessening in value. Mass marketing by companies such as CARFAX and AutoCheck has conditioned auto consumers to avoid buying cars with accidents on their vehicle history. Additional factors may be taken into consideration in evaluating the loss in value of a damaged and repaired vehicle and may include, but not be limited to: the vehicle itself (i.e. rare collectible, originality, market desirability etc.), the vehicle's pre-loss condition, severity of the sustained damages (i.e. frame damage, flood, fire etc.), the subject vehicle's history (i.e. one owner, prior damage/repair, death of occupants etc.), quality and thoroughness of the performed repairs, (i.e. quality of parts, materials, workmanship, etc.) and additional value considerations including, but not limited to values associated with preowned certification programs, etc. All U.S. states and territories except Nebraska allow third-party diminished value claims filed with the at-fault insurance. The legal basis for third-party claims is rooted in the tort law. A car owner must take the initiative to make the claim and prove their loss. An independent USPAP-compliant appraisal serves as proper proof of loss in a diminished value claim. In hit and run, uninsured or underinsured motorist situations, a number of states allow the car owner to make a diminished value claim with their own insurance company under their Un/Underinsured Motorist Property Damage policy. The length of time to collect Diminished Value will vary depending upon each state's statute of limitations for first-party (contractual) claims and third-party (tort) claims. Diminished value can only be collected by the legal owner of the vehicle. That's why if a consumer leases a vehicle, they cannot collect Diminished Value because the legal owner of a leased vehicle is the leasing company. (en)
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