How Do You File A Diminished Value Claim?
It’s best as early as possible in the claim to discuss the issue with your adjuster to get an idea of their attitude on the matter. Let them know at the onset that you intend to pursue a diminished value claim. If their attitude is fine and they ask you to present evidence of your claim then you might not have too much trouble from them. If they make an offer early on, then you might want to consider investigating an accurate amount for your vehicle’s diminished value because insurance adjusters are skilled at paying as little as possible. If their attitude is negative from the onset and they say something like you have to sell your car to experience diminished value, then you know you’re going to have problems from them.
After you have an amount for your diminished value, the first step in pursuing a claim is to make a formal demand by presenting your information to the insurance company and informing them that you anticipate their paying your damages. You’ll need to send something in writing to the adjuster specifically addressing how much your diminished value is, and demanding payment. One of the best ways to do this is via email because there is a specific time and date stamp associated with electronic communication. The next best way is to send a fax and make sure you keep the confirmation page. The third method is to send a letter via mail. If you must mail the letter, it’s best to track its delivery certified with return receipt requested to make sure they received it. If you like to be meticulous, you can use all three methods, just be sure that the documentation doesn’t deviate from one method to the next.
If you utilize a diminished value appraiser then they should be able to provide you with a sample demand letter. If you don’t have a professional working with you, then you can find sample demand letters online. It’s important to include all information the company will require and be certain that your demand is clear and concise. It’s also good to include a deadline date in all of your demands. This helps to prevent the adjuster from dragging things on. Also, If you have to incur additional expenses and your cost goes up, for instance you have to litigate the matter, then you don’t want the adjuster going back to the amount in your outdated demand letter. A week from the date received is a good customary deadline because adjusters can be very busy people and might not have a chance to respond earlier than that.
After the demand you may need to follow up for a response. It’s best at this point to limit your communication to requesting a written response to your demand. You want to avoid getting into a discussion about diminished value as the adjuster may be better equipped or downright belligerent. If you can communicate by email then by all means do so because everything is time and date stamped. Otherwise, wait a couple days after the deadline and make a follow up call. Try your best to speak with the adjuster in person, but if you absolutely have to leave a message then consider periodic follow-up calls. Remember to limit your verbal communication on the matter unless you consider yourself to be a skilled negotiator. Try to be courteous and it’s important that you avoid an attitude with the adjuster. This almost always results in an adversarial situation where the adjuster will be difficult to deal with.
If you receive a written response, then it should either be a settlement offer, a denial, or a request for additional information. If there are no issues regarding disputed liability, then adjusters are supposed to respond in good faith within 30 days. If they don’t do so you may wish to contact their supervisor or notify the Department of Insurance.
If they make an offer, then you must decide if you will take it or not. If you don’t like the offer, you need to evaluate what you are willing to accept and try to negotiate a settlement by making written counter offers until you come to an amicable resolution.
If they request additional information then try to provide the information they requested or you may need the assistance of a professional. Many adjusters will require an unbiased third-party report.
If they deny your request then you may have to utilize a professional to assist you. Feel free to give us a call and we’d be happy to discuss your situation. Sometimes you’ll have to convince the adjuster. We’ll be happy to go over your claim and may be able to provide suggestions. Ultimately depending on the circumstances you may need to seek legal remedy.
Many times a diminished value claim will be lower than the small claims court threshold of $5,000. In that case you can file with a local justice of the peace. The insurance company has a duty to prevent judgments against their insured so this may prompt the insurance company to increase their offer. This can be risky though because insurance companies have significant legal resources and you may find yourself up against an attorney. Often times insurance companies see the economic reality that it costs more to pay an attorney to defend a diminished value case than it does to settle, but the insurance company could have in-house attorneys they pay a set salary to.