How to Calculate Diminished Value in Arizona
Arizona diminished value law enables you to reclaim lost vehicle value after another person or business damages your vehicle in an accident. You normally have two years to file a claim after the accident, though in some circumstances it can be shorter. To calculate diminished value, experts consider the difference between your vehicle’s market value before and after the accident.
Claimants who most likely benefit from a diminished value claim own a vehicle that is newer, has no prior damage, and requires significant repair. However, you don’t need to exclusively meet these criteria to be able to recoup your auto’s lost value. Other factors such as condition and upkeep, mileage, and market demands are considered toward a diminished value calculation.
Types of Arizona Diminished Value Claims
There are two common types of diminished value claims in Arizona:
- Inherent diminished value. This is the most common claim type, which reimburses for value lost because your vehicle has accident history. Even if properly repaired, your car likely won’t sell for what it was worth prior to the accident. An inherent diminished value claim aims to reimburse you for this market loss.
- Repair-related diminished value. If an auto shop botches your repairs, you can seek further financial recovery through a repair-related diminished value claim.
How Insurance Companies Calculate Diminished Value
To get a sense of what an insurance company will be willing to pay for your diminished value claim, consider the following:
- How much was your car worth before the accident? Factor in year, make, model, mileage, overall condition. Searching a variety of local dealerships and classified ads for similar vehicles can give you a general idea of what yours might have been worth. Usually, newer cars lose more value in an accident because they haven’t depreciated as much from their original sticker price. An exception would be an older vehicle of particularly high demand or value, such as a non-refurbished collector’s model.
- Generally speaking, insurance companies have a formulated approach to estimating a baseline value loss for a vehicle. From there, they use various multipliers to determine your car’s specific value loss. If damage was significant (such as structural or frame), you’ll likely see more diminishment than if it was moderate or less severe with cosmetic damages that don’t impact the safety and operability of the car. Similarly, you’ll likely receive a higher value loss calculation if your car has lower mileage.
How to Look Out for Yourself on a Diminished Value Claim
As you see, the diminished value claim process can be complicated. Insurance companies will be looking to protect their bottom line by paying out the least they can for your vehicle’s lost value, while the market will insist you’ve lost more than the insurer calculated. Any Arizona diminished value claim must be proven, which often requires an expert appraisal and valuation.
While pursuing a diminished value claim on your own comes with the benefit of keeping all funds recovered, there are risks in not receiving what you are rightfully owed and the burden of navigating a time-consuming process alone. Having an attorney pushing for your best interest can help get maximum financial recovery for your diminished value claim as well as any injuries sustained – even those you might consider minor.
Vrana Law Firm handles many diminished value claims for our clients with success. We’re one of few firms in Arizona who will take on a diminished value claim; and if you’re injured, we can help you seek recovery for both. Still unsure as to whether you have a diminished value claim worth pursuing? One of our attorneys will discuss with you one-on-one the details of your case to determine your best options, at no charge to you. Contact us to set up your free attorney consultation at our Tempe office, or by phone.