Diminished value refers to the economic or market value that your car loses due to being involved in a car accident. Even if your vehicle is fully restored to its pre-collision condition, prospective buyers are likely to assess its worth as lower compared to a similar vehicle with no history of accidents. Diminished value, also known as diminution of value, represents a form of economic loss that you can seek compensation for from the responsible driver or their car insurance company in accordance with Colorado law. In most cases, your pursuit will begin as an insurance claim. Learn more about how to submit a diminished value claim to State Farm in Colorado.
Diminished Value Explained
Diminished value is the reduction in a vehicle’s market value due to its involvement in an accident, even after being fully repaired. This reduction occurs because potential buyers are often hesitant to pay the full market value for a vehicle with a history of accidents, regardless of how well it has been restored. There are three types of diminished value:
- Inherent Diminished Value: This refers to the reduction in a vehicle’s value simply because it has been in an accident.
- Immediate Diminished Value: This occurs right after the accident and includes the reduction in the vehicle’s value due to the visible damage sustained.
- Repair-Related Diminished Value: This is the reduction in value attributed to the quality of repairs, including any cosmetic or structural imperfections that may persist.
Under Colorado diminished value laws, you can pursue one or more types of claims against third parties, only. You cannot pursue a DV claim against yourself or your first-party insurance coverage. You cannot receive compensation from your collision or comprehensive coverage. If your car was damaged by an uninsured, underinsured, or hit and run driver, you can pursue a claim under your uninsured motorist property damage coverage if you have it.
State Farm and Diminished Value Claims
State Farm, like other insurance companies, recognizes diminished value claims, but their approach may vary. It’s important for policyholders to understand the process and requirements for filing a diminished value claim with State Farm:
- Determining Eligibility: State Farm typically considers diminished value claims for vehicles involved in accidents that were not the policyholder’s fault. If you were at fault, pursuing a diminished value claim may be more challenging.
- Gather Documentation: To support your diminished value claim, it’s crucial to gather documentation, including repair invoices, before-and-after photos, and any estimates or appraisals that indicate the decrease in your vehicle’s market value.
- Obtain a Diminished Value Appraisal: State Farm may require an independent appraisal to assess the diminished value of your vehicle. Hiring a qualified appraiser with experience in diminished value claims can strengthen your case.
- Submit a Claim: Once you’ve gathered all necessary documentation, submit a diminished value claim to State Farm. Be prepared to provide a detailed explanation of the accident, the repairs made, and how these factors have contributed to the diminished value of your vehicle.
- Negotiation and Settlement: State Farm will review your claim and may negotiate the settlement amount with you. If an agreement is reached, you’ll receive compensation for the diminished value of your vehicle.
- Litigation, if necessary: If you are unable to reach a satisfactory settlement, you may decide to file a lawsuit against the liable parties and let a judge or jury decide the value of your case.
Initiating a Claim: Three Ways to Get Started
Initiating a Claim: Three Ways to Get Started
- Phone Submission: Call (800) SF-CLAIM (800-732-5246) to connect with a State Farm representative who can expertly guide you through the claim filing process. If your insurance card lists a different number for first-party claims, be sure to use that alternative number instead.
- Online Filing: State Farm’s website provides a quick and convenient platform for filing an auto claim, catering to both existing policyholders and new claimants.
- Mobile App Usage: Download the State Farm Mobile App onto your smartphone or preferred device and follow the instructions provided to submit your claim. The app is available for download on the App Store, Google Play, or by texting MOBILE to 78836 for a direct download link.
While State Farm does not specify a strict deadline for claim submissions, it strongly encourages “prompt reporting,” ideally within 24 to 72 hours after the accident. It is crucial to utilize one of the designated channels for filing. Once your claim is submitted, an insurance claims adjuster will reach out to you. This individual will be responsible for overseeing the processing of your claim and addressing any further inquiries you may have.
Effectively Communicating with a Car Insurance Claims Adjuster
The initial claim you submit acts as a preliminary report of the car accident, and it’s important to note that you don’t need to provide all the details at this stage. However, it is crucial to avoid admitting fault or discussing injuries with the claims adjuster until you have a comprehensive understanding of the incident.
Your primary goal should be to protect your legal rights from the outset when dealing with a State Farm insurance claim. This involves exercising caution in your conversations with the adjuster. If you find yourself uncomfortable handling interactions with the claims adjuster on your own, it’s essential to remember that you have the option to seek the assistance of an experienced car accident lawyer in Denver, Colorado. They can take the lead in the claim filing process, overseeing your entire car accident case and working towards achieving the most favorable outcome.
Frequently Asked Questions about state farm diminished value claims
How long do I have to file a diminished value claim with State Farm?
Diminished value claims follow the same legal deadlines as other car accident claims. The general rule in Colorado affords you three years from the date of the collision to resolve your claim. Some car accident claims have a shorter deadline. It is in your best interests to pursue your claim as quickly and efficiently as possible.
What happens if I cannot settle my case with State Farm?
If you do not receive a satisfactory offer, you can continue to negotiate your claim until the adjuster says they offered their best offer. At that point, you must choose to accept the offer or file a lawsuit.
How much is my diminished value claim worth?
A DV claim value depends on a number of factors including the age of your car, mileage, severity of damage, whether the repairs restored the cosmetic and physical condition and pre-crash market value. Each claim will be different based on the specific facts of your car accident and your vehicle.
Will State Farm pay DV if I am at fault for the auto accident?
Diminished value claims follow the same liability and compensation rules as other tort claims. Colorado is a fault state which means the liable parties owe the victims for the damages they cause. Colorado also follows modified comparative negligence rules, which means you can recover a portion of your damages if you are partially at fault for your own damages.