HISTORY
Unless it specifically states otherwise in your contract, an insurance company is required to repair yourpost-accident vehicle to its pre-loss value.
A 1998 state of Oregon case reaffirmed your rights as an insured driver when the Oregon Supreme Court—after a lower court initially ruled for Farmers Insurance—ruled that defendant Jose Gonzalez, whose 1993 Ford pickup was totaled had a right to have his vehicle restored to its pre-loss condition.
The Oregon Supreme Court declared:
We conclude that Dunmire‘s interpretation of “repair” applies to the provision at issue here. Under
Dunmire, a 1941 case that ruled that if the insurance policy specifically limits liability of the insurance company to “what it would then cost to repair or replace the automobile, or parts thereof, with other of like kind and quality,” a complete restoration of the property has not occurred unless there has been no diminution of value after repair of the auto mobile.
Repair, in this sense, encompasses the restoration of the vehicle to its condition prior to the collision. “We see no reason to overrule that well-established legal interpretation,” the recent Gonzalez Supreme Court ruling held.
“Therefore, under the policy at issue, if an attempted ‘repair’ does not or cannot result in a complete restoration of the vehicle’s pre-loss condition, the vehicle is not ‘repair[ed],’ and the resulting diminution of value of the vehicle remains a “loss to [the] insured car caused by collision” for which defendants are liable under their policy.”
To be qualified:
The concept of diminished value claims is new to most people and it can be a little difficult to understand.
Example:
Lets say you have a van that was bought a year ago for $30,000 and it’s blue book value is now $27,000 because you’ve taken good care of it and haven’t driven it more than usual. Your driving along through an intersection and someone runs the red light and smashes into your van’s back door going over 35 mph. Luckily the air bag comes out and you have your seatbelt on so you are just fine. Your van, however, is a different story. It has some serious dents in it and when you take it to the body shop to get an appraisal, the cost of repairs comes to $4325! You take it to the automobile repair shop and the body shop does an excellent job. Your van looks about as good as it did before the accident. However, you decide to buy a sportier car that meets your new lifestyle now that the kids have gone. You list your van for sale in the Auto For Sale section of the newspaper at $27,000 and buyers come to look at the car the following weekend. The first thing they ask is “Has the vehicle been in an auto accident?” Even if you didn’t tell them the van was in an accident, the buyers could still look up the van’s history. Once they found out about the accident, the buyer would no longer be willing to pay you $27000, but instead would offer $22,000. In this case the diminished value would be $5000.
Original value – after accident and repairs value = diminished value claim
$27000 – $22,000 = $5000
If you’ve already settled with the insurance company on the body damage, you probably can still file a separate diminished value claim in Oregon or Washington state if the repairs were done recently.
Contact Peterson Law Offices NOW for a complimentary diminished value claim consultation if the accident happened in the Portland Metro Area!