Diminished Value Claims in California

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Compensation for Diminished Value can be requested in California, but there's no assurance that an insurance company will pay out for it. Diminished Value has been defined as the actual or perceived loss in market value or resale value which results from a direct and accidental loss. Some insurance companies have added this definition to their policies to discourage the idea that physical damage coverage should include Diminished Value.

Many states allow insurance companies to add in this language into a policy. When they do so, it typically means that the policy states that the insurer will pay for direct and accidental loss or damage, meaning actual physical damage done to the covered auto, but not indirect loss such as a loss in value, meaning the Diminished Value of the vehicle.

If you're making a claim for damages, you'll need to consult with the insurance company's insurance adjuster to see if Diminished Value is specifically excluded in their policy.

You may want to start by finding out how much your vehicle would have been worth before it was damaged and what it would be worth if you sold it now. The dealership where you purchased the car may be able to help you obtain the vehicle's value after the accident.

Many insurance providers believe the role of auto insurer is to repair or replace a damaged vehicle to pre-accident condition and the insurance coverage is not intended to guarantee the value of a vehicle before or after a repair is made. You may need to seek legal counsel to obtain Diminished Value compensation. However, you can start by discussing this issue with the claims adjuster.

The California Department of Insurance may also be of help to you if you contact their consumer division to discuss your situation.

Diminished Value California Facts
First Party Covered NO
Third Party Covered YES
Statute of Limitations 3 YEARS

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