Property damage claims should be simple. In most car accidents, fault is relatively clear. The at-fault driver's insurance company should pay to fix the car, or if it is a total loss, they should pay the value of the car. It should be fast, easy, uncomplicated, and leave the victim of negligence with minimal interruption to their life.
Unfortunately, we too often hear how property damage claims impact a person's life in very real ways. In some instances, a person's car will not be drivable after a collision. There will be a period of days or weeks where a person was without a car. The person might have difficulty reselling their car. Maybe it was a classic car, and there is extra sentimental value attached to it. They may have problems affording a rental.
Property damage claims are not always simple. Whether you go through your own insurance company or the at-fault driver's insurance company, your damages are limited by the insurance contract in many ways. The different policies might have different procedures. They may have different rental requirements and allowances. They may or may not allow for the intangible losses.
Those intangible losses, including “loss of use” and “diminished value” are two of the more untapped sections from which to recover damages. Loss of use is meant to represent the non-economic losses – inconvenience and so forth — associated with the person's ability to not use their car for a time. This could include the extra sentimental value associated with the car. However, many insurance policies do not allow you to receive that compensation and simultaneously cover the costs of a rental while your car is being repaired or while you are in search of a new car if it was totaled. The terms of the compensation available are dictated and limited by the contract. You can bring a claim against the person for these losses, but his or her insurance company might not be obligated to pay the damages.
Similarly, diminished value is meant to represent the stigma associated with a car being resold after it was in an accident. The market value of a car in an accident is less than the market value of a car with a clean history. That difference, usually analyzed and proven by an expert in the automotive repair and/or sales industry, is the diminished value damage. However, many uninsured or underinsured motorist policies specifically exclude diminished value. Therefore, this is a claim can usually only be made through the other driver's insurance.
An added complication is that, practically speaking, you can really only do one diminished value claim per car. So it has to be worthwhile. Replacement of a bumper, quarter panel, or other superficial and cosmetic part may not justify the expense and effort to request a diminished value damage. The damage has to be severe enough and important enough to the integrity of the automobile to invest money, time, and effort in getting the full damages.
Negotiating a better property damage settlement is about knowing your rights under the insurance policies. Rental, towing, storage, loss of use, and diminished value are areas where people oftentimes leave money on the table because they do not know to ask. Know what damages are recoverable, keep your receipts and invoices, and ask the insurance carrier for the compensation you are owed.