If you got an accident with your new brand car and your insurance company repairs your vehicle and it looks newer than before. Do you think that the value of your vehicle is same prior and after the car accident? Absolutely not, in fact the value of your vehicle is much lower than before and the difference in the value prior and after the accident is the diminished value. The loss caused by an accident in the value of vehicle is termed as diminished value.
Insurance Companies Accept Diminished Value Claims?
In most of the cases insurance companies don’t accept the diminished value claim because they don’t consider it as their own responsibility. Often people want to know the authentic reason for refusal of insurance companies to meet diminished value claim. Actually, insurance companies don’t consider it something to pay according to auto insurance law. According to insurance companies, they are only responsible for repair of the vehicle like prior to accident and compensation for the value is not the part of their contract and obligation. Furthermore the companies don’t add the cost of diminished value coverage while selling the insurance policy to their customers. The insurance companies believe that customers will have to pay thousands of dollars to get this kind of coverage for their vehicle.
