When and How to Open a Diminished Value Claim



When and How to Open a Diminished Value Claim

So, you have been in an accident, your brand-new dream car is beginning to be repaired by the at-fault party, and you’re mad. You now have to worry about the Carfax and the lost value of your car. The good news is, you may be able to recoup that loss by opening a diminished value claim. Diminished value is essentially the loss in the fair market value of your vehicle after it has sustained damages in an accident. To learn more about exactly what diminished value is, please visit our article, “Claiming Diminished Value in North Carolina.” This article will focus on when to open your diminished value claim.

When to Open your Claim

In short, IMMEDIATELY! North Carolina has some particular rules that must be followed when opening a diminished value claim. By opening your claim at the same time as everything else (property damage, bodily injury, etc.) you protect yourself from running amok of these particular rules.

Now, don’t panic! If you are currently saying to yourself, “Well I just learned about diminished value… I didn’t open or notify the at-fault party immediately…am I out of luck?” The answer is no! While opening your claim early may be best practice, it is not required. With this being said, there are some requirements that must be followed and we will discuss below.

Requirements to Remember:

The 30 Days Rule – According to the North Carolina Department of Insurance, a party MUST open a diminished value claim within 30 days after repairs. Essentially, this means that a party could be barred from bringing a diminished value claim if the claim has not been asserted promptly (within 30 days of repairs). Two examples of how this rule works have been provided below:

  1. Susie has just recently been in an accident and her vehicle was repaired. Susie’s vehicle was returned to her on October 2. Susie then reads about diminished value and decides that she wishes to pursue the claim. She notifies the insurance company of her wishes to pursue a diminished value claim on October 16.In this example, Susie will be able to proceed with her diminished value claim and will not be affected by the 30-day rule, as she notified the insurance company within 30 days.
  2. Now, use the same facts from the example above, except now, Susie finds out about diminished value much later and notifies the insurance company on November 4th.Using these facts, Susie would likely not be allowed to pursue her diminished value claim as she failed to notify the at-fault party within 30 days from the return of her vehicle.

As you can see, the 30-Day Rule can be quite harsh. Therefore, it is important that you are aware of the timeframe in which your claim must be opened and keep track of the date in which your vehicle was returned. Furthermore, diminished value claims are often neglected as insurance companies are not required to inform you of your right to recover diminished value for your vehicle, and rarely do so. So, take the initiative, and get your claim in before the 30-day mark!

How to Open Your Diminished Value Claim

So, you are within the “30 Day” window to open your diminished value claim and you are ready to move forward. I am sure you are now asking, “How?” The easy answer is IN WRITING! While not necessarily required, we recommend always opening your claim in writing. By doing so, you protect yourself against an adjuster later stating that he/she does not recall a conversation about diminished value. This letter should be sent via certified mail, fax, or e-mail.

This letter should include several items: the insurance company’s name, the assigned adjuster, the current date, your name, the date of accident, and MOST importantly, your claim number. Furthermore, it should include something similar to the following language:

This letter is a formal notice pursuant to 11 NCAC 04. 0421(5) that I will be pursuing a diminished value claim for the damages to my vehicle.

For more information or if you have any further questions, please do not hesitate to contact our office directly at 919-313-2729, or via our website chat system below.


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