If you are injured in an accident in Port Charlotte, Florida, not only could you be seriously hurt, but your property may suffer damage as well. For example, if a careless driver crashes into another car on the road, that victim’s car might be completely totaled.
An insurance company will usually give you a sum of money that is equal to your car’s actual cash value if it is totaled in an accident. However, It can be difficult to figure out how they calculate this amount. Knowing how they do this can help you have a better understanding of what kind of payout you could potentially receive. An experienced Port Charlotte car accident lawyer will know exactly how to fight for the fair amount that you deserve.
What Is a Car’s Actual Value After a Traffic Accident?
A car’s ACV, or actual cash value, is what it was worth before the accident occurred, minus any depreciation that has happened since.
Let’s say, for example, that a car costs $15,000 today. However, after only four years of use, it gets totaled in a collision. An insurer may then decide that its value depreciated by $1,500 annually. Therefore, after those four years have passed, the car is now worth only $9000 total; or put another way: $15000 minus $6000 equals $9000. The owner will receive this amount as their insurance payout. Depending on other circumstances though, it is possible to obtain less money from an insurance company following a car accident.
Significant Factors in Calculating a Car’s Actual Cash Value
The insurance company will pay out an amount that accounts for the car’s ACV in the case of a total loss. However, they will first assess the vehicle to determine its actual value. The following factors play into this estimation:
- Basic vehicle information about a car, such as its year, make and model, mileage, etc.
- The vehicle history before the accident
- A car’s post-accident condition, before and after repairs
- The primary use of the vehicle
- Vehicle modifications (aftermarket parts added to the car after purchase and other alterations to its original condition)
- Possible salvage and resale value of the whole car or parts
- Prices of similar vehicles within the area, in dealerships, or in verified publications
ACV is a car’s fair market value minus depreciation. It’s typically lower than the sticker price of a new car.
A car’s fair market value or replacement value may not always be accurate, as it depends on additional outside circumstances.
Actual Value and Fair Market Value
The value of a car can sometimes match the fair market value, which is determined by what somebody would pay for it on the market without knowing about any damage.
Even though a car’s real value and fair market value can be different, there are potential buyers willing to pay more reasonable prices.
Is ACV Different From Replacement Costs?
Car insurers will assess a car’s replacement value in an accident case. A collision can render a car totaled or partially lost, and its replacement value is the sum of money it would take to replace the vehicle with a new one.
In contrast to ACV, depreciation does not lower a car’s replacement cost. As a result, this value could accurately show a car’s fair market value, or it could increase for certain models.
Total Loss and Diminished Values in a Car Accident Case
There are two ways insurers assess physical damage to a car following an accident. The first is when they deem it a total loss or write it off, which occurs when the repairs would cost more than 80 percent of the car’s value before the accident happened. They will then pay out an amount that matches a car’s actual value. However, sometimes a collision doesn’t totally ruin a car. In this instance, it can get the needed repairs to return it back to its pre-accident state.
The car’s resale value will significantly decrease after the accident, no matter how well it is repaired. Filing a diminished claim is one way to help get back the money lost from the decrease in the value of your car. You should, however, understand how this will affect your case before taking any legal action.
Types of Diminished Value After An Auto Accident
There are three main types of diminished value in a car accident case:
Intermediate Diminished Value After A Car Accident
This value is a car’s resale value before an accident minus its resale worth after an accident. It also reflects the loss in value before the owner repairs it.
Inherent Diminished Value After A Car Accident
The most common type of diminished value claim is when a car’s worth decreases after it has been in an accident, even if it receives the best repair possible. Oftentimes during resale, potential buyers will offer less money for the car because of its history.
Repair Related Diminished Value After A Car Accident
A car may not be worth as much money if it cannot look or function like it did when it was first bought. This can happen from cheaply made repairs, using the wrong kind of replacement parts, or an overall poor job is done trying to fix the vehicle.
Filing a Diminished Value Claim
In Florida, car owners are entitled to claim a diminished value for their vehicle after it has been in an accident. This means that they can sue the at-fault party in the accident and receive compensation for the decreased value of their car. To do this, they need to file a diminished value claim with their insurance company.
Before filing a car insurance claim for diminished value, be sure to have evidence of the lost value (diminution) as well as its dollar estimate. It can be tricky to file this type of claim, but contacting a Port Charlotte car accident lawyer can help you decide if it’s the best option in your case. When making the decision to file such a claim, keep the following things in mind:
- The Car’s Value Before the Accident: A diminished value claim occurs when you appraise your car’s worth in relation to the market value. The appraisal should show how much the accident damaged your vehicle. It is less likely, however, that you will receive a payout if your car is old and has many dents or scratches.
- Being at Fault in an Accident: If you want to be compensated for diminished value, it is critical to establish who is at fault. If you are found responsible for the damages, chances are your insurance company will not give you a payout.
- State Law: In Florida, car insurance is required by law in order to use the roads. If a victim’s personal injury protection insurance policy does not cover their losses, they are legally allowed to file a claim and receive damages from the at-fault party. Additionally, diminished value claims have a 4-year Statute of Limitations.
Accidents frequently lead to very large expenses for those involved. This can include damages to property, like a car, or bodily injuries. A Port Charlotte car accident lawyer will help you receive compensation for these losses.
If you’ve been in a car accident, our team at FGB Law Firm can help. We’ll work with you to build a legal case and fight for the best possible outcome. The sooner you contact us after an accident, the better. By seeking legal counsel right away, you increase your chances of receiving compensation for damages. Contact our legal experts at 941-979-9010 or complete our online contact form to schedule your consultation today.