How do you claim Diminished Value? What do I need to file a claim? How do I get the Insurance company to pay Diminished Value? How much will I get?
First of all my attorney says I need to state a disclaimer: This is not legal advice and should not be used as such, I’m not an attorney, and this is for informational purposes only. I do not guarantee any results with this information. If you feel you need legal advice, you should retain an attorney in your area. It is your right to acquire an attorney at any point in the process, whether immediately, or if the insurance company becomes unresponsive along the way.
Oregon Stature, ORS. 20.080 declares that in some cases you are entitled to receive not only your DV settlement but also reasonable attorney’s fees if the settled amount is at least one penny more than the offered amount. In other words, if the insurance company offers you $800.00 and an attorney settles for $800.01, they should pay reasonable attorney’s fees. The max settlement on this is $10,000. You would think this is a field day for attorneys, but I’ve found there are very few who are willing to go this route. Most want a 40% contingency fee, and many may not take the case unless they feel the settlement will be at least $5000. Please beware, READ ANY CONTRACT THOROUGHLY BEFORE YOU SIGN IT! I’ve seen several situations where people believe they have no obligation but the 40%, then find out that they owe for extra processing fees, appraisal fees and a slew of other “extra” fees, even though they were lead to believe they would collect at least 60% of the settlement.
So you’ve been in a collision, (never call it an accident as it eludes that you were possibly at fault also) now what? Most people’s first move is to contact the at fault person’s insurance company and to get all the pertinent information to move forward to get your vehicle fixed.
Document the damage. The more complete the documentation, the easier it will be to settle your claim. One Picture is worth a thousand words. I suggest getting an appraiser involved as early as possible if you’re interested in filing a Diminished Value Claim. Having good solid documentation will increase you chances of settling for the amount you want to settle for. A photo showing a crumpled structural area is hard to deny, but if the panel has already been replaced it may be impossible to even determine the amount of actual damage.
Filing an accident report. According to the Oregon DMV, you must file an Oregon Traffic Accident and Insurance Report (Form 735-32) with DMV within 72 hours when:
Damage to the vehicle you were driving is over $1,500;
Damage to any vehicle is over $1,500 and any vehicle is towed from the scene as a result of damages from this accident;
Injury or death resulted from this accident; or
Damages to any one person’s property other than a vehicle involved in this accident is over $1,500.
Car Accident in areas open to the public for the use of motor vehicles must be reported. Some drivers who are in car accidents offer to fix the damage and try to get the other driver not to file a report. If you agree to do this, you are breaking the law if the amount of damage is more than $1,500. Always remember to keep a copy of your report for your own records.
Contacting the Insurance Company.
- Get all pertinent Information.
- You have the right by Oregon law to have your vehicle fixed where you want to. They can not make you fix your vehicle at their shop.
- They are required by law to return your vehicle to pre-loss condition.
- Don’t forget to find out the policy limits. (the minimum liability requirement in Oregon is $20,000) This can be used up very quickly on a luxury vehicle. Ask if the other party has other insurance (like an umbrella policy) that may cover more.
Finding a Body Shop. Most of the body shops out there are pretty good. There are a few horrible ones too. Just remember, everyone makes mistakes. They may not always be intentional. I normally recommend Leif’s Auto Collision Center in Tigard as I’ve seen very consistent results from their shop and the insurance companies hate them. Why? Because they try to get 100% of your car fixed, not 80%. I’ve found that the final amount from Leif’s is normally about 20% higher than other shops because they insist on advocating for their customers and try to use OEM parts instead of Junk Yard, Reconditioned and Aftermarket Parts. Are they perfect? No, like I said, everyone makes mistakes. But I believe they work harder to make sure your car is repaired as close to pre-loss condition as possible.
Body shops are not the only ones who take short cuts. Sometimes it is the Body Shop Tech. Here’s an example: Insurance company pays 2.0 hours on a setup and measure. Tech gets paid commission on those hours. It actually takes him 3.0 hours to do a proper setup and measure on the frame machine. Work order only says ‘setup and measure” so he spends 15 minutes and get s paid for 2 hours by measuring your two ton car’s frame alignment using a tape measure instead of spending 3 hours and getting paid for 2 hours aligning it properly on the frame machine. Read the reviews, ask around. Be wary of who you ask though as many get a kick back to refer you. BTW, I receive no incentives for any recommendations I give.
Finding a Diminished Value Auto Appraiser. Of course, I hope you choose me. But here’s some things you may want to look for in your appraiser:
- Appraisal Fees – I work on a flat fee. So even if I spend 20 hours and make two trips to the body shop for photos, it’s still the same price. There are a lot of appraisers that have hourly fees, or additional fees. It may sound like a good deal at $50 per hour initially, but when you get a bill for $700.00 you may change your mind. In this industry I’ve found you get what you pay for. The “free” calculators and normally not free, and many insurance companies will void these type of appraisals immediately anyway. Then you’re just out that money. The money back guarantees are normally nearly impossible to claim from these type of companies. I give a money back guarantee also. It is claimable, but you do have to prove you’ve followed certain practices to settle the claim. I’ve had a couple of people try to claim the insurance company wouldn’t settle, then found out they actually did and even paid for the appraisal. So now we do ask for proof of denial.
- What’s The Difference Between An Appraisal And A Report? My Appraisals are produced using the Uniform Standards of Professional Appraisal Practice, and are considered a “Real Property Appraisal” and are normally 20 to 90 pages long. 98% of the other “Diminished Value Reports” I see are normally never longer than 2-3 pages and are black and white text only. My appraisals are full color with photos and documentation to back them up.
- How Long Will The Appraisal Take? – It can take as little as 48 hours, to as much as several weeks and I’ve had some take even months. A good appraisal is based on solid information. I’m good friends with several of the top Diminished Value Appraisers in the country and we work collectively on some of these appraisals. Of course we don’t share personal information, but we do share basic vehicle information to help us come to a good solid conclusion. We’ve added a new system going forward that will publish a private page for you to follow your appraisal’s status. You’ll even be able to watch research being gathered and prepared for the appraisal.
- Who Is Your Appraiser Working For? At this time, I personally only know of only two Licensed Oregon Appraisers that work for consumers only. That’s myself and Mr. Fisher at Autoloss. What does that matter? Well, I wouldn’t want an appraiser that is being paid $5000 a month by the insurance companies to provide appraisals against consumers, to produce an appraisal that would be against that same insurance company that is giving him consistent work. Sounds like a conflict of interest to me. I’ve even seen situations where clients called appraisers and they give them a Diminished Value Estimate of $4000. then that appraiser is hired by the insurance company and his Diminished Value valuation goes down to $300. That’s not even in the same ball park. I would have no problem preparing one appraisal per year for any insurance company, although I’m sure they wouldn’t hire me. Why? My Appraisals are not designed to be lower than the actual amount they should be. I find that most appraisals acquired by the insurance companies tend to be extremely conservative. Then you also have companies that give over inflated values. Why? Because they tell people what they want to hear. If they really have $2000 in Diminished Value, they may say they have $5000 just to sell the customer on their service. I’m a true believer in if you don’t ask, you don’t get. But if the valuation is under or over inflated, it jeopardizes the integrity of not only that appraisal, but also every appraisal you produce.
Negotiating the Claim. So now you have your appraisal in hand, it’s time to send it over to the insurance company. You’ll want to include a demand letter also (yes we include a sample demand letter for you). The demand letter makes it official and gives them 30 days to give you a reasonable offer. I’ve found that most companies will normally settle a Diminished Value Claim around 50 to 85 percent of the appraisal as long as the appraisal is not over inflated or under valued.
Comparing Appraisals. The insurance company will have their appraiser prepare a Diminished Value Report. Many times these are from a large national company with very conservative valuations. Their methodology will not be listed and they’ll claim their methodology as being proprietary and a trade secret. In other words, they don’t want you to know how they came up with such a low valuation. Once you receive their Diminished Value Report, you’ll send it to me and I’ll do a comparison summary to highlight the pros and cons of both appraisals. This will give you bullets for your gun. If there is something significantly wrong with their report/appraisal, you may be able to ask the insurance company to void it and go with your appraisal.
Do I need An Attorney? You’d normally think having an attorney would increase the odds significantly, but from what I’ve seen, Lawyers are only seeing about a 15 to 20 percent increase over a consumer negotiated settlement. I’ve had several clients over the last three years to negotiate a settlement that they were not satisfied with, so turned it over to an attorney and found they actually netted less money than what they had already negotiated. Here’s an example:
Appraisal shows $4000. in Diminished Value
Insurance company offers $2000.
Client retains Attorney @ 40% contingency.
Attorney Settles for $3000.
Client Nets $1800.
That’s a $200. loss even though there was a 50% increase by the Attorney.
Do you ever get 100% of the appraisal? Sure, this happens, but it is not the norm. If the Diminished Value is less than $5000. it is much easier to claim. $5000-$9900, you need some tenacity. Over $10,000, it’s going to be much harder to settle and you may need to consider an attorney.
Who’s the easiest to deal with? In my opinion, Nationwide. The used to be one of the hardest, but since they’ve developed a Diminished Value Department, they recognize a good appraisal and will normally settle quickly. The harder ones are the companies that don’t have DV departments and Reps don’t know how to handle it or even what to actually pay. So they try to pay nothing.
How Long Does a Diminished Value Claim Process Take? Most times, it is less than 30 days after the appraisal and demand letter is submitted. I’ve seen clients get checks within 72 hours of my sending them the appraisal. It seems Insurance companies are paying a lot quicker over the last 6 months that they previously did. I’m guessing they don’t want an attorney involved due to having to pay extra fees to them also. So they are working with the claimants to settle as quickly as they can.
Have more questions? Contact Ken Nix at 503-420-3333 for a free estimate.