Each insurance company operates in its own manner when it comes to automobile diminished value claims. One constant, however, is that all of them strive to either delay, low ball or outright reject this type of claim in the hope that you, the vehicle owner, will become frustrated and simply give up. Why was your diminished value claim denied? First of all, it would be cavalier to imply that a diminished value report provided by The St. Lucie Appraisal Company will automatically be accepted and a settlement paid to the penny. That is simply not the case but when it comes to defending diminished value claims, insurance adjusters evaluate appraisals prepared by different independent appraisers and act upon them accordingly. If an insurance company determines that they have a good chance of prevailing in small claims or civil court, your claim could likely be denied. Conversely, when confronted with a comprehensive report that provides irrefutable proof of the existence and amount of value that your vehicle lost after collision repairs, they are forced to acknowledge the possibility of losing. In litigation, not only could you be awarded the full amount of diminished value, expenses such as the cost of the appraisal, expert witness and legal fees could also be recovered. Insurers would also bear the cost of their own experts and lawyers. It goes without saying that the prospect of losing in court isn’t particularly appealing to them.
We have seen most of the diminished value reports that are prepared by independent appraisers. Methodologies vary but some, of course, are better than others. Was your Chevrolet damaged by the negligence of another party? Did the accident happen in Arizona, for instance? The St. Lucie Appraisal Company obtains the opinions of the sales managers at six Chevrolet dealers in Arizona based on the vehicle and the damages that were repaired. This method is time-consuming but ultimately provides the best proof of the existence and amount of diminished value.
WAS YOUR DIMINISHED VALUE CLAIM DENIED?
Some examples of how other independent appraisers calculate diminished value will surprise you. Even more surprising is that these appraisers actually charge you for reports that have absolutely no basis other than to point out the fact that they are “experts.” The reports from these appraisers came to our attention after we were hired after vehicle owners’ claims were rejected. The reasons are clear.
Ten examples used by independent appraisers:
- The information contained herein, is based upon the information provided to me as well as the visual characteristics of the vehicle and its parts at the time of inspection. The opinions expressed herein are based upon; technical training, experience and acquired knowledge in this field of expertise.
- Provides sales prices of comparable vehicles and then an arbitrary diminished value amount based on nothing whatsoever that is contained in their report. The appraiser concludes: “In arriving at this figure, I gave consideration to the concerns which a buyer, if knowledgeable that there was a potentially severe accident, would have, and the impact upon whether such buyer would buy the vehicle and the conditions upon which a buyer may buy the subject vehicle.”
- Uses a formula similar to the discredited Rule 17-C. Corrective procedures “based on experience” reveal not only the flawed methodology but also a lack of real-world evidence to corroborate their findings.
- “Based on my personal experience as a licensed Motor Vehicle Damage appraiser with 21 years of experience in the automotive field, ASE certified mechanic, Associates degree in Mechanical Technology, a licensed automotive inspection and emissions mechanic, review of the estimate, picture review and the type of repairs needed on the vehicle, I place the diminished value at $XXX.XX.”
- Simply assigns a diminished value amount with no substantiating information.
- “Although subject vehicle was repaired to industry standards, at this time, I find the above to show cause of a combined 15% loss to its dated fair market value.” Their report shows no methodology for determining this amount other than the appraiser’s personal opinion.
- “In order to determine this vehicle’s ultimate Diminished Value, we have devised a Point System based on the following categories. They are in order of importance, with the first category representing the aspect of the repair process which has the most impact on the vehicle’s value.” This report uses a formula to calculate the amount of diminished value.
- “With over 20 years experience appraising automobiles, it is our opinion that, as a result of this accident, the specific type of vehicle, its age and its miles, would result in the vehicle’s market value having diminished no less than $XXX.XX after satisfactory repairs. This reflects nothing more than the appraiser’s opinion.
- “It is the opinion of this expert that there is evidence to suggest the value of the subject vehicle should be diminished value as a result of the body repairs.
- Uses a formula based on Rule 17-C modifiers that do not reflect an actual loss of value based on any tangible evidence.
Submitting an automobile diminished value report that simply states an appraiser’s opinion based on their alleged expertise or on a random formula or algorithm guarantees a certain amount of push back from the insurance company. If a magistrate or mediator can’t understand the methodology or doubts the validity of an opinion-based appraisal, you have wasted your money on the report. The St. Lucie Appraisal Company doesn’t offer opinions. We leave that to the sales managers at recognized dealerships who buy and sell cars all day long. They are familiar with bad Carfaxes and how their customers shy away from such cars. They know how these cars fare at automobile auctions. Appraisers should not assume to know more. Hiring an independent appraiser to prepare a diminished value report? Caveat Emptor. Let the buyer beware.
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