What’s the Value of My Car After a Car Accident?
What’s the Value of My Car After a Car Accident?
After a car accident, the car’s value will decrease even if it was professionally repaired and restored to its original condition. This decrease in the car’s value after an accident is called diminished value. Insurance companies use the term diminished value to refer to the comparative value of the car before and after the accident.
There are three kinds of diminished values that insurance companies track. These three values include:
- Immediate diminished value — the car’s resale value after the accident but before repair
- Inherent diminished value — the term insurance companies use most commonly to refer to the loss of resale value due to the car’s accident history
- Repair-related diminished value —the loss of resale value for a car that did not receive quality repair
How is the Value of a Car Determined After an Accident?
Determining diminished value is a calculation insurance companies use to reset the value of a car that has been in an accident. Below are some following steps to help calculate diminished value.
- Determine the value of your car by looking it up on the NADA or Kelley Blue Book website.
- Apply a 10 percent cap to the price from the website. Insurance companies call the cap the base loss of value. This cap is the most money an insurance company will pay on the damages listed in the insurance claim. For example, if the car was worth $5,000 before the accident, the insurance company would only pay up to $500 in damages after the accident.
- Insurance companies will apply a damage multiplier and a mileage multiplier to determine the car’s value after an accident. For instance, the car’s value with the $500 cap was further adjusted .5 due to moderate damage from the accident. However, it had low mileage and a .8 mileage multiplier. This means that after the accident, the car’s value was adjusted downward by $200.
This is the diminished value of the car after the accident.
How our Austin Car Accident Lawyers Can Help
If you were injured in a car accident in Austin, the Loewy Law Firm can help you file a personal injury claim to fight for compensation from the other at-fault party. Compensation can help cover property damages, like your vehicle, as well as physical injuries and emotional suffering.
The Loewy Law Firm has substantial experience in personal injury cases. We can help you seek the compensation you need to recover from a car crash. Our firm has represented our clients for over 15 years with successful case results that speak to our quality work and dedication to our clients.
Contact us online or give us a call at 512-280-0800 for a free consultation to discuss your case.