Assessing Diminished Value

Diminished Value reports can be secured from several different sources.

The best method of acquiring an unbiased DV assessment is to go to a Diminished Value professional.

If you chose one of the resources explained below, remember: WE TOLD YOU SO!

First, consumers could rely on the insurance company to calculate this loss, but if insurance reps aren’t honest enough to tell someone about their right to file a DV claim in the first place, can they really be trusted to fairly and equitably assess this loss? When pressed to calculate DV, insurers often use a method known in the industry as “17c”. This formula basically maximizes the loss of value at 10% of the vehicle’s pre-loss value and then reduces the amount of diminishment through the use of “modifiers” based on mileage and damage severity. To learn how the formula works click here.

Second, there are “independent appraisers” offering DV reports. By definition, the vast majority of these “independent appraisers” could be more properly labeled “independent INSURANCE appraisers” – meaning they derive the majority of their income from doing insurance-based work for insurance companies. How unbiased would their DV assessment be? Would they risk upsetting their primary source of income?

Third, an internet resource could be used to get a diminished value report. The price for these services can be very tempting – as low as $17.95 in some cases. The old saying “you get what you pay for” definitely applies. In most cases, $49, $59 or even $99 buys the consumer a piece of paper, no support, no follow-up, nothing but a piece of paper with numbers on it. How do you get a piece of paper to answer questions about your claim? Worse still, is that many of these sources use a variation of the 17c formula. Why would anyone pay a fee to get what they would have gotten for free from the insurance company?

Fourth, other internet sources use “proprietary formulas”. There is no formula or algorithm that can address all of the intricate aspects of an accident – the year, make and model, mileage, the overall condition of the vehicle prior to the loss, the amount of damage, the type of damage, the extent of the damage, the severity of damage – both overall and on a panel-by-panel basis – and the damage area all impact the amount of diminishment – there is no formula that can accurately consider all of these aspects.

Fifth, there are also some companies that charge a percentage of the amount recovered much like a law firm. They really don’t care about the consumer’s loss, they simply take what the insurance company offers, collect their portion, and pass the balance on to the consumer. While this may be more convenient than dealing with the insurance company, the results are rarely satisfactory.

Sixth, some people think they can just go to a dealership and get an offer for trade. While dealer trade-in is certainly one market that diminishment can be assessed in, it is not the only one. The other problem with dealership numbers is that dealers are “for profit” and insurance companies are quick to point out that bias and routinely dismiss any quotes provided by dealers.