As someone with insurance, you’re well-versed in the trials and tribulations of finding the right auto insurance policy. Be it a blessing or a curse, auto insurance doesn’t come in a “one-size-fits-all” package. When you decide to get auto insurance, your insurance agent will take a lot into consideration before determining your premium rates. Things like your age, gender, car make, model and year and your driving history will all impact the cost of your monthly premiums. The amount of coverage your will receive after a traffic collision however is determined by the pre-loss value of your vehicle.
To find an insurance policy that will protect you in the worst of situations, visit CoverHound to compare auto insurance quotes among leading insurance providers.
Diminished Value and Selling Your Car
After you’ve been involved in an accident, you will proceed to file a claim with your auto insurance company. If all goes well, your insurance agency will cover the cost of repairs to your vehicle and you’ll be back on the road in little time.
But as is life, things are never that easy. Let’s say you were in an accident that required extensive body repair to your car. Your insurance covers it (yay!) and you drive the car for the next few years. Looking to get some new wheels, you put your car up for sale for the Kelley Blue Book asking price. You hear from an interested party and meet the potential buyer in a public location so they can take the car for a test drive.
The buyer is ready to make a deal, but offers a lowball sum and is unwilling to negotiate, citing your car’s accident history. Even though your car was repaired and is in fit running condition, its resale value is diminished because of its accident history. This is what is known as diminished value.
Diminished Value and Your Auto Insurance
According to the Insurance Information Institute, (III) diminished value claims can be applied to your auto insurance policy, but this is dependent on your state’s court rulings, legislation, and who was at fault in the auto collision that damaged your vehicle. In some states, your diminished value claim will be rejected if you were the driver at fault in the accident. In a majority of states, III has found that because of the way the language is written in the collision section of the average auto insurance policy, insurance companies are not responsible for covering the diminished value.
However, if you were the motorist hit by a careless driver, every state in the U.S. (except for Michigan) will award you reparation for the diminished value of your vehicle. Insurance agencies are required to do this by law, as the person who caused the accident is responsible for compensating the victim of the collision for the entire amount of monetary damage. If the person who hit you is uninsured, your uninsured/underinsured insurance will cover the expense, again, depending on your state’s legislation. Only about half of the state’s in the U.S. will cover the vehicle’s diminished value with an uninsured/underinsured insurance claim.
At CoverHound, we work hard to provide you with a range of insurance packages that will cover you in every accident scenario. click or call today to get your free auto insurance quotes.