How to File a Diminished Value Claim in Alabama

After getting into an accident, your vehicle may not be a total loss. It may be able to have repairs to get it back on the road again. However, even after these repairs are made, the value usually decreases.

The technical term for this is "diminished value," and it could impact your life. Alabama drivers should know all about what is involved in a diminished value claim to know what to expect when dealing with the aftermath of a car accident.

Understanding Diminished Value Claims

When diminished value is mentioned, it refers to the difference in a vehicle's market value before and after a crash. Even if it has been fully and expertly repaired, when you sell your car or trade it in, you will likely be offered less than its current fair market value.

Thinking about it from the perspective of a buyer, would you rather buy a vehicle that had no accident history or one that had been in a crash? As such, this loss in value tends to be major, no matter how high-quality the repairs are. Making a diminished value claim allows you to recover the damages for the decreased value your vehicle now has after the car accident.

Below are the three types of diminished value claims.

Immediate

Immediate diminished value claims refer to the difference in your vehicle's value before the accident took place when compared to its value after repairs.

Inherent

Inherent diminished value claims are by far more common, relating to the loss of value that was caused by the crash.

Repair-Related

With repair-related diminished value claims, it refers to the value lost as a result of poor repair work conducted after an accident.

Trading in or selling your vehicle will be a challenge if it has had more than a little dent or paint damage. While vehicle history reports are a fantastic tool in helping buyers learn more about a car, there is simply no hiding its history. This electronic log will include that it has been in an accident and had repairs made, which will make the value of your car worth much less.

Why a Driver Would File a Diminished Value Claim

The rules for filing a diminished value claim vary by state, though it can be a smart move if you were in an accident you didn't cause and your vehicle's value has been dramatically impacted. It is important to understand that repairs made can restore a vehicle, though these repairs cannot restore the lost market value that remains as a result of the logged accident history.

Filing a diminished value claim allows you to seek compensation for the difference between the value of your vehicle before the accident and the diminished value it now has after the repairs.

What Is Considered Significant Damage to a Vehicle?

Significant vehicle damage typically involves any structural or mechanical damage. Structural damage harms the integrity of the vehicle's frame and affects its stability and safety. It's more than cosmetic, and could put you at risk on the road if you drive it without making repairs.

Mechanical damages are other issues that can result in significant vehicle damage. If the engine, transmission, or other vital parts are damaged in the crash, they can cause serious problems if they are not repaired properly. The majority of vehicles with this type of mechanical damage tend to be totaled out as repairing them often costs more than the replacement. Structural damage to the frame may cause issues leading to misalignment or affect the suspension, handling, steering, and stability.

How to Know If Your Vehicle Has Serious Damage

The only way to know if your vehicle has taken on any type of serious damage is to have a reputable professional take a look. You may see some dents and think that your vehicle is fine, though there are hidden damages beyond those dents that can compromise your vehicle's safety and functionality.

It may not be obvious at first if you have frame damage, though trying to drive it may clue you in. It won't handle properly, and something will certainly feel off. Going deeper, electrical damage may be another problem that the other driver caused in your accident. Wiring and other sensitive components can cause malfunctions in a variety of your vehicle's systems. From the lights to battery or engine problems, there is much that can go wrong with this type of damage.

Even the onset of rust, which can develop over time, may be triggered by your accident. Rust can destroy the structural integrity of a vehicle, resulting in costly future repairs. If you were in an accident that someone else caused, you should always have your vehicle inspected to ensure that there are no underlying issues that could cause you serious harm or financial loss down the road.

Who Is Responsible for Paying Diminished Value Claims?

Since states will vary on fault laws, it is important to know those before proceeding with a diminished value claim. In most cases, the insurance company representing the at-fault driver will cover the compensation for the diminished value of a vehicle. This will require presenting evidence to support your claim, including the police report from the accident, photos and videos, and repair bills or receipts.

Some states will require victims to use their own policy coverage for diminished value claims. Every driver should be aware of what their insurance policies provide. Unfortunately, most people simply buy the minimum required insurance without fully understanding what is and isn't covered. This can leave you in a bind after an accident, as you may be stuck bearing the financial impact that someone else negligently caused.

What Do Alabama's Laws Say About Diminished Value Claims?

In Alabama, the law states that seeking the diminished value of your vehicle is only permitted in third-party cases. This means that you must make this claim with the at-fault driver's insurance company, not your own insurance company. It also means that you can't use your own uninsured motorist insurance in these situations, which may make things difficult if you were the victim of a hit-and-run accident or the other driver was not insured.

All drivers in Alabama are required to carry the minimum in liability insurance for bodily injury at $25,000 per person and $50,000 per accident, plus property damage at $25,000. If your car accident was caused by an uninsured driver or the driver fled the scene, you should consult a car accident attorney to learn about the legal options you may have available.

What Is Required for Filing an Alabama Diminished Value Claim?

In addition to the requirement that the car accident was caused by another driver, there are other requirements you should know ahead of filing a diminished value claim in Alabama. One of them is that your vehicle needs to have significant damage. In other words, you can't file this type of claim if you only have a tiny dent.

Another requirement for eligibility to file this type of claim is that you need to have your vehicle repaired to be in its pre-accident condition. You will also need to have documentation of both the damages and repairs made. If you don't meet these requirements, your claim for diminished value will be considered invalid.

Here's What You Need to Do to File a Diminished Value Claim in Alabama

If you're sure that you meet the requirements mentioned above, then you can take the steps to file this type of claim.

Conduct an Initial Assessment of Your Car

Before you can begin to file a diminished value claim, you need to have a qualified professional appraise it. They will determine your car's pre-accident value as well as the post-accident value. You will need to have all documentation organized and make sure it includes your repair invoices as well as the accident report.

Calculate Your Car's Diminished Value

When it comes to calculating the diminished value of your car, several key factors must be examined. The year, make, and model of your vehicle is one of them. Certain makes and models will have a greater diminished value because of their perception in the market as well as their resale potential. For example, if you have an older model vehicle, it loses its value differently when compared to newer vehicles that have been in a car crash.

Another important factor is the extent of the damage your vehicle sustained. When there is only minor cosmetic damage, it won't impact the value quite like structural damage. As such, this is why only vehicles needing significant repairs can qualify for diminished value claims. A detailed repair record and damage assessment are needed to fully calculate the diminished value.

You'll also need to be sure you're getting high-quality repairs using genuine manufacturer parts rather than aftermarket parts. Similarly, the standard of workmanship is examined. If you took your car to a friend rather than a certified mechanic at a reputable repair shop, you may run into issues. However, if you take it to a qualified professional to ensure it is restored to the condition it had before the accident, then you will be in a better position.

Vehicle market value before an accident is yet another crucial point. The mileage, overall condition, and market demand for your particular vehicle model will all play a role. If your vehicle was in excellent condition before the crash and had a high market value, it will most likely have a more significant drop in value compared to another vehicle that had already depreciated.

Many metrics go into accurately calculating diminished values of vehicles. If you're not sure how to take the first steps, then you may want to contact a lawyer who can help you get the necessary documentation and put you in touch with reputable mechanics and appraisers for a better chance at recovering the full compensation you deserve for this claim.

Submit the Claim

After you've taken these steps, you can then submit your diminished value claim to the other party's insurance company. It saves time to make sure that you have included all documentation noted above, allowing you to negotiate a fair settlement.

Keep in mind that insurers are always looking out for their bottom line, and they generally won't offer you the full amount in an attempt to minimize payouts. This is why you may want to set up a free initial consultation with an attorney to make sure the insurance company provides a fair offer.

Common Issues That Arise in Diminished Value Claims

Even though you may meet all of Alabama's requirements for filing a diminished value claim, there may be other challenges that stand in your way. The most common issue is when the insurance company representing the other party issues a dispute on the value of your claim.

Failing to document everything properly may also cause issues, since the insurer will need proof. It's also difficult to navigate all of the requirements and meet deadlines, especially if you suffered any injuries in your accident. Many car accident victims are told that they can easily handle any claims they have by going through the insurer, though it should be noted that this process is seldom a simple one.

The vast majority of victims in these scenarios are given an offer that falls short of the diminished value. They are then told this is the maximum that can be provided. Unfortunately, most believe it and sign the settlement. By working with a lawyer from the start of your diminished value claim, you can prevent these types of issues from making you settle for less than the worth of your case.

The Right Steps to Take After a Car Accident to Avoid Issues with Your Claims

While car accidents will usually involve vehicle damage to some degree, they can also cause you to suffer other damages. You may have physical injuries along with mental and financial impacts. Knowing the right steps to take after an accident can help you with your diminished value claim and injury claim, and help you recover the financial losses you've incurred.

Call the Police to Report Your Car Accident

If you have a great deal of property damage, are injured, or there are any fatalities, you will need to involve the police after a car crash. Even if you're uncertain of the extent of vehicle damage or injuries, it's best to notify law enforcement. Officers will come to the scene of the accident and assess what happened. They will fill out a police report that details their findings along with the insurance and contact information of all drivers involved.

The police report may not sway anything in a case, though it can provide crucial details about fault. For example, if the officer found that the other driver failed to obey traffic laws, then that driver would be issued a citation, and this information would help show that they were at fault.

Get a Prompt Medical Evaluation

While you will understandably be upset about the damage caused to your vehicle, your first priority should always be your health. Most car accident victims experience a surge in adrenaline afterwards, and it often means they miss the key signs and symptoms of certain injuries.

You might be inclined to feel relieved when you're not bleeding and you can move your arms and legs. However, you may have damage to internal organs that is causing internal bleeding or a traumatic brain injury, both of which can be incredibly serious matters. Even if you don't think you have a life-threatening condition, you should get checked out immediately. Head to an urgent care center or your own doctor as quickly as possible.

If any injuries are discovered, you can get them treated, and evidence of your injuries will be logged in your medical records. This can also help you with filing a claim for your injuries as well as diminished value because it is likely you will have both types of claims.

Document the Evidence

In addition to the police report and medical records you'll receive, you need to have evidence of the accident. Use your smartphone to record videos and get photos of the damage to your vehicle. Be as comprehensive as possible since often-overlooked details may help your case.

Alabama is an at-fault state, though it requires proof of that fault. The more evidence you have to corroborate your side of the events, the more likely it will be that you get a favorable outcome in your case. Don't forget about witnesses that may have seen the accident take place. They might be able to provide additional details that can benefit your claim.

Do Not Admit Fault

In Alabama and throughout the South, manners are prized, which is why it will go against every fiber in your body to restrain yourself from saying, "I'm sorry." Uttering this phrase can come back to haunt you as insurance companies take it to mean an admission of fault. You might be saying it because you're sorry that this happened, though that's not how it's going to look.

Even if the other evidence can show the other driver caused the crash, you don't want to take the chance you'll be blamed. Alabama follows a contributory negligence rule, which states that even if you're only 1% at fault, you can't seek compensation for the accident.

Hire a Car Accident Attorney

Between rigid state laws on fault and the complexities of the legal landscape, it may be best to hire a lawyer to represent your best interests. You may be fine without one if someone only chipped a little spot of paint off your bumper. However, if you've been seriously injured and your vehicle has significant damage to warrant major repairs, you shouldn't leave anything to chance.

Understanding the Statute of Limitations for These Types of Claims

When you're the victim in a car accident, putting your physical and mental health first is imperative, though you will need to get the ball rolling on your claims. When it comes to injury claims for car accidents and diminished value claims, they each have their own statute of limitations, or time limits, that allow you to take legal action.

It is important to understand that before you can file a lawsuit, you should be seeking this compensation through the at-fault party's insurance company. However, since insurance companies often try to minimize payouts or deny claims, you may need to issue legal recourse. By the time you realize that there are issues with your claim, you may have little time left to file with the courts.

For personal injuries, you have only two years from the date of your accident to take action, while diminished value claims allow for up to six years. No matter the length of time permitted, it is ideal to get things going right away. Evidence fades as do witness accounts of the incident, and the sooner you file, the fewer complications you will face on your road to recovering compensation.

Should I File a Diminished Value Claim?

Ultimately, the decision to file a diminished value claim is a personal one, and it will require you to consider if you meet the eligibility requirements for taking this action first. If you do, it is prudent to ask an attorney about the specific factors in your case to ensure you're getting the full worth of your case.

Additionally, if you have sustained injuries of your own, your attorney can help you file an injury claim and a diminished value claim at the same time. They will also take over all communications with the insurance company, investigate and gather evidence, and negotiate on your behalf. Since most attorneys provide a free consultation initially, it's a good time to schedule one and see if you have a good chance of recovering your damages.