Car Insurance Claim and Diminished Value Question
Reader’s Question:
I was found to be at-fault in an accident and the other driver filed a claim against my car insurance company for property damage. He quoted about $5,000 that he said he lost in diminished value. Is there such a thing as “diminished value” claim that is payable under my auto insurance policy?
Chelsea
Fayette, KY
If you just heard about a “diminished value” claim, it does exist. This claim is based on the idea that any car that has been in an accident, regardless of how well the repairs are done, is worth less than the exact same car that hasn’t been in an accident.
The physical damage section of an auto insurance policy does not usually cover claims for a car’s “diminished value” after an accident. It applies to direct and accidental damage only. By definition, direct damage is the actual physical damage done to the car, not a loss in value.
This is the reason why some courts began to question this approach and ruled that since diminution in value was not specifically excluded by the terms of the policy, it was covered.
However, a diminished value claim is a liability claim for property damage and cannot be judged in the same light as a physical damage claim. Under a liability claim, the insurer agrees to pay damages for property damage for which the insured is legally responsible because of an auto accident. If you’re legally liable for the damages of the claimant, then whatever the amount for which you’re liable for is the amount the policy will pay. Be aware that it still is subject to the limit of liability amounts.
It’s always advisable to contact your insurance agent in Fayette, KY or your insurance company directly to have a further discussion regarding the terms of your policy.
Should I Accept My Auto Insurance Company Settlement Offer?
Reader’s Question:
I’m Gayle from Fayette, KY and had a recent car accident. I want to know what actions must I take after a car accident? Do I need to accept a settlement offer from the insurance company?
Gayle
Fayette, KY
Hi Gayle. Under the Kentucky law (KRS 189.635) you are required to call the police to report the accident if someone is harmed or injured; or one of the cars is rendered inoperable. If no police investigation is made and either the car suffers $500 or more in damage expense you must report the incident to the State Police within 10 days. Next, your car insurance company requires you to report the accident to your insurance company and fill out the appropriate forms.
As for your second question, the answer can be a Yes or a No. Car insurance companies in Fayette, KY are notorious for offering settlements that are far less than the injured party deserves. However, if the car insurance company is offering what you feel the car is worth, then you can accept it. It will also be advantageous if you consult an experienced lawyer that is knowledgeable on car accident laws. By contacting an auto accident injury lawyer you may be able to receive a much larger settlement than the car insurance company has offered.
Will Getting In An Auto Accident Affect My SR22 Filing?
Q: Will getting into an accident interfere with my SR22 filing?
A: Getting into a car accident will not directly affect your SR22 filing, but it could do so indirectly. Your SR22 filing is only affected by whether or not you are paying for car insurance. If you have car insurance, your SR22 status is fine. If you don’t, then it isn’t, and you can lose your license. What could affect your SR22 filing is your possession of car insurance coverage, which can be affected by an accident.
If you are already a high risk customer–which you probably are, since you are filing SR22 insurance–then getting into an accident which is caused by your own negligent driving is almost certain to cause negative consequences. While some companies may be lenient and simply raise the rates on your premiums as a result of the accident, other companies may choose to cancel your car insurance policy as soon as they find out.
You should remember, though, that your car insurance company may not necessarily find out about your accident. Most companies only check your record once a year or even once every three years, so your accident may have fallen off your record by the time they check. However, if they don’t find out on their own and you don’t tell them, then once they do find out they could still cancel your policy because of misrepresentation.
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