The Auto Insurance Industry’s Biggest Secret

Vehicle Diminished Value

So, you’ve just had a wreck and your insurance (thank goodness you have it) is going to pay for your car to be repaired. But wait! That’s not the end of the story; what happens when you want to sell your car for a new one? Because it was in a wreck, you will probably not be able to get the pre-crash value of your car. This is what is known as diminished value.

It’s important to realize that this diminished value is not something that car insurance companies will offer without being asked. In some cases, drivers had to go to small claims court in order to recoup the amount due. Diminished value is often in the ballpark of 30% – $10,000 for a typical new car. This means that, unless you have more money than you know what to do with, you will probably want to file a claim, assuming that you weren’t at fault for the crash.

But why does this happen? If it’s fully repaired, why can’t you get your pre-crash value for it? This boils down to a lack of vehicle integrity. As an example, imagine your son’s toy car. When he broke it and you glued it back together, was it as strong? Not-so-much. That boy had it re-broken within minutes and now it’s in the kitchen trash can. The same thing goes for cars. While repairs can be made to vehicles, it inherently leaves them weaker. How extensive the damage was is not often taken into account when that 30% gets sliced from a car’s value, which is a little unfair, but this is the way it is.

If you don’t have much time or energy to put into the process of getting your due, there are a few companies who will assist (for a price, of course). These companies jump at the chance to help out, so feel free ask questions. It would be a shame to avoid being scammed by the insurance company only to be scammed by someone else!

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