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  1. #1
    Join Date
    Jul 2007
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    Default Can You Make a Diminished Value Claim Under Your Own Auto Insurance

    My question involves insurance law for the state of North Carolina.

    North Carolina has a Diminished Value law. It does state that I can collect from my insurance if hit by an uninsured motorist. My question is regarding an underinsured motorist.

    Before the hit and run wreck on 3/12, I had a very new 2015 Honda Pilot valued at 30,000 for a trade-in. The hit and run driver was arrested and found to have liability insurance. The liability insurer found my Pilot to be a total loss. They explained that the driver only had 25,000 and that I needed to let my insurance company know about it. I did and this is where things go bad. My insurance completes an estimate on the Pilot and said it is not totaled and that they would fix it. The initial estimate using used and non-oem parts is 14,500. That is before a tear down and look inside.

    I fought them on using non-oem parts because they would not be covered by my Honda warranty and the Extended warranty I had already purchased when buying the Pilot. They agreed on using all OEM parts and plan to send the shop a check for 14,500 and then they expect a supplemental to outline additional repair costs. The shop has already told me the real repair is probably between 20,000 and 22,000 using oem and with other damage they expect to find. The Diminished Value of the Pilot is at least 10,000. I hired an appraisal company and they will complete a full post repair analysis, but first look is at least 10,000. I know this is right because my dealer where I have purchased a new Pilot just about every year flat told me that instead of 30,000 pre-wreck trade-in, I will now only get 20,000 even after a full OEM repair. They said normally they would not take such a trade at all. If the driver had no insurance, I could collect the 10,000 from my insurance.

    My insurance is saying that since the driver has liability, I have to make the diminished value claim there. Since the repair may be 22,000 and there is only 25,000 to get, I will loose up to 8,000 if the Pilot is fixed. Suing the hit and run driver will be useless. Is there anything I can do to not loose 8,000? Note: My own insurance company seems to be working against me and is fighting hard to get the Pilot fixed and not totaled. This is even after I explained that there is a salvage bid for 7,000 for the Pilot. I have asked them to accept the total loss determination from the other driver's liability insurance, collect the 25,000, and then sell the Pilot for 7,000. I would be happy if only given 31,000 for the total loss. They would have 32,000 to work with and have no loss.

    I am surprised and stumped that they are fighting so hard. Note: I also have Gap insurance that will pay off the 31,000 loan if there is a deficiency in a total loss situation. Sadly that policy clearly states that MY insurance must deem the vehicle a total loss. So, I am a good driver, have collision insurance, have gap insurance, and still may lose 8,000.

  2. #2
    Join Date
    Mar 2013
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    17,065

    Default Re: Liability V Collision V Gap V Total Loss V Forced Repair

    Quote Quoting rblevi01
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    My question involves insurance law for the state of North Carolina. North Carolina has a Diminished Value law. It does state that I can collect from my insurance if hit by an uninsured motorist.
    That's true. I was able to find a sample copy of a North Carolina auto policy. See if it matches yours as I'll be referring to it's provisions.

    https://static1.squarespace.com/stat...nce+Policy.pdf

    Quote Quoting rblevi01
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    My question is regarding an underinsured motorist.
    Sorry, but based on the sample policy, damage to your vehicle is not included. Refer to Page 9 of the sample policy and see if the provisions match your own policy.

    Part C2 - Combined Uninsured/Underinsured Motorists Coverage
    Insuring Agreement
    We will pay compensatory damages which an insured is legally entitled to recover from the owner or operator of an uninsured motor vehicle because of:
    1. Bodily Injury sustained by an Insured and caused by an accident; and
    2. Property damage caused by an accident.
    The owner's or operator's liability for these damage must arise out of the ownership, maintenance or use of the uninsured vehicle.


    Now here's the important part:

    We will also pay compensatory damages which an insured is legally entitled to recover from the owner or operator of an underinsured motor vehicle because of bodily injury sustained by an insured and caused by an accident.

    Note that "bodily injury" only is mentioned with regards to underinsured motor vehicle and "property damage" is not.

    Therefore, your own policy does not cover damage to your vehicle in the Underinsured Motorists coverage.

    Quote Quoting rblevi01
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    Before the hit and run wreck on 3/12, I had a very new 2015 Honda Pilot valued at 30,000 for a trade-in. The hit and run driver was arrested and found to have liability insurance. The liability insurer found my Pilot to be a total loss. They explained that the driver only had 25,000 and that I needed to let my insurance company know about it. I did and this is where things go bad. My insurance completes an estimate on the Pilot and said it is not totaled and that they would fix it. The initial estimate using used and non-oem parts is 14,500. That is before a tear down and look inside. I fought them on using non-oem parts because they would not be covered by my Honda warranty and the Extended warranty I had already purchased when buying the Pilot. They agreed on using all OEM parts and plan to send the shop a check for 14,500 and then they expect a supplemental to outline additional repair costs. The shop has already told me the real repair is probably between 20,000 and 22,000 using oem and with other damage they expect to find. The Diminished Value of the Pilot is at least 10,000.
    Now look at Page 12 of the sample policy and, again, see if the provisions match the provisions of your own policy.

    Part D - Coverage for Damage to Your Auto
    Insuring Agreement
    We will pay for direct and accidental loss to your covered auto or any non-owned auto, including their equipment. Direct and accidental loss does not include any reduction in the value of any vehicle after it has been repaired, as compared to its value before it was damaged.


    That means no diminished value coverage on your policy at at all.

    Quote Quoting rblevi01
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    My insurance is saying that since the driver has liability, I have to make the diminished value claim there.
    That's correct.

    Quote Quoting rblevi01
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    Since the repair may be 22,000 and there is only 25,000 to get, I will loose up to 8,000 if the Pilot is fixed. Suing the hit and run driver will be useless.
    Not necessarily. Judgments are good for at least 5 years. If you can't collect now, you might be able to collect later. If you don't sue, you are guaranteed not to collect from the other driver.

    Quote Quoting rblevi01
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    Is there anything I can do to not loose 8,000?
    Sure. After your car is repaired, drive it for 10 or 15 years until it's not worth much and you'll have gotten your full value out of the car.

    Quote Quoting rblevi01
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    ote: My own insurance company seems to be working against me and is fighting hard to get the Pilot fixed and not totaled. This is even after I explained that there is a salvage bid for 7,000 for the Pilot. I have asked them to accept the total loss determination from the other driver's liability insurance, collect the 25,000, and then sell the Pilot for 7,000. I would be happy if only given 31,000 for the total loss. They would have 32,000 to work with and have no loss. I am surprised and stumped that they are fighting so hard.
    I'm not. Refer to Page 14 of the policy and read

    Limit of Liability:
    Our limit of liability is the lesser of the:
    1. Actual cash value of the stolen or damaged property;
    2. Amount necessary to repair or replace with other property of like kind and qualify. This amount does not include any reduction in the value of the property after it has been repaired, as compared to its value before it was damaged.


    As long as your claims people believe that the car can be repaired, it gets repaired. You do not have any say in the matter and the opinion of the other driver's insurance company doesn't count.

    Quote Quoting rblevi01
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    Note: I also have Gap insurance that will pay off the 31,000 loan if there is a deficiency in a total loss situation. Sadly that policy clearly states that MY insurance must deem the vehicle a total loss. So, I am a good driver, have collision insurance, have gap insurance, and still may lose 8,000.
    Yes, you'll lose 8,000 if you imagine you will lose 8,000.

    Here's something to consider:

    Diminished value damages are completely speculative and improper. You don't know if you'll ever sell your vehicle. It might get totalled in another accident. It might get destroyed in a fire. If you do sell it, you don't know when you'll sell it. You don't know if your sale price at some future date will be because of the accident history, condition of the car, market factors, or desperation for cash. You also don't know if the person to whom you sell it will make an effort to research the car's accident history. Accordingly, giving you something based on "diminished value" could amount to compensating you for damages you never suffer or grossly overcompensating you.

  3. #3
    Join Date
    Jul 2007
    Posts
    5

    Default Re: Liability V Collision V Gap V Total Loss V Forced Repair

    I agree with most all of what you say. What really gets to me is this. A salvage bid on the 2015 Pilot is $7,000. The liability insurance will pay 25,000 if the vehicle is totaled and they have already said that it is. I would walk away for $31,000. That is the loan amount. Liability will pay my insurance 25,000 and with the 7,000 they would be whole. I would be whole. The entire would would be happy. PS... I do know when I will sell it. A Pilot that severely damaged will never be right again. Any sensible person world agree there can be issues that show up months or years later. One example... the axle was driven into the transmission. Will it fail later? Who knows. Why is it my risk to have? I planned to trade it in immediately after repair. The dealer knows me and the vehicle and will offer only 20,000 for trade-in. Of course I can do that paying the extra 10,000! My loss will be real. I can always drive it for 15 years and hope like heck nothing happens and that if there is a new wreck the entire safety and unibody system works as designed. I walked away this time. I am not sure a repaired Pilot will work the same. it might, it might not. Still, as with most answers here... there is nothing I can really do.

  4. #4
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    Default Re: Liability V Collision V Gap V Total Loss V Forced Repair

    Quote Quoting rblevi01
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    I agree with most all of what you say. What really gets to me is this. A salvage bid on the 2015 Pilot is $7,000. The liability insurance will pay 25,000 if the vehicle is totaled and they have already said that it is. I would walk away for $31,000. That is the loan amount. Liability will pay my insurance 25,000 and with the 7,000 they would be whole. I would be whole. The entire would would be happy.
    Here's an idea.

    This assumes that no repairs or tear down has been started.

    Accept the $25,000 from the other driver's liability carrier on the condition that you keep the vehicle.

    Then you sell it to the salvage bidder for $7000.

    Quote Quoting rblevi01
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    PS... I do know when I will sell it. A Pilot that severely damaged will never be right again. Any sensible person world agree there can be issues that show up months or years later. One example... the axle was driven into the transmission. Will it fail later? Who knows. Why is it my risk to have? I planned to trade it in immediately after repair. The dealer knows me and the vehicle and will offer only 20,000 for trade-in. Of course I can do that paying the extra 10,000! My loss will be real.
    Yes, in that even, it will be real. But you know something, sometimes in our lives fate hands us a bad deal and we lose money and there's nothing we can do about it but get over it and get on with our lives. There are things that can happen to you that are a lot worse than losing $10,000 so if that's all the bad that ever happens to you, count your blessings.

    Quote Quoting rblevi01
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    I can always drive it for 15 years and hope like heck nothing happens and that if there is a new wreck the entire safety and unibody system works as designed. I walked away this time. I am not sure a repaired Pilot will work the same. it might, it might not. Still, as with most answers here... there is nothing I can really do.
    Then make the best deal you can with whoever you can.

  5. #5
    Join Date
    Jul 2007
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    5

    Default Re: Liability V Collision V Gap V Total Loss V Forced Repair

    I thought this was legal forum and not a philosophical discussion about who has it worse. Under the "worse things can happen" clause of your life's philosophical policy, no one should post to the forum and you should never respond. I mean unless a person has lost everyone they love, and are on their deathbed in the worst pain imaginable, and post just before they die, then you could always say "it could be worse". Once that person does post, your response will not be read because they will have just died. Ok, silliness out of the way, I have a legal question if there is anyone here that answers them. This would be specific to North Carolina. I called a attorney about my case and he spoke with me a long time for free although I wanted to buy some of his time. He tells me it is my insurance's responsibility to fix my car. He also said that subrogation DOES NOT put my insurance company in any better position to collect money from the liable party's insurance. He said when the car is fixed to file a claim and if denied he will take the case. He tells me there is nothing in law that states my insurance collects from liability first. This is contrary to many posts I have read, so I wonder if this is something specific to NC. I am ready for the typical response here that I talked to an attorney, blah, blah, blah, and so on. I am just looking for a second opinion here in my spare time. When the repair is made and if my claim denied, then of course I will seek legal advice and pay for it. I am just interested to see what people think here if there are any constructive comments.

  6. #6
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    Default Re: Liability V Collision V Gap V Total Loss V Forced Repair

    Quote Quoting rblevi01
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    I thought this was legal forum and not a philosophical discussion about who has it worse.
    You're on the Internet. You will hear people's opinions.
    Quote Quoting rblevi01
    I called a attorney about my case... He tells me it is my insurance's responsibility to fix my car.
    The driver who hit you had property damage liability coverage to cover the cost of damage to property as a result of the insured driver's negligence, including your vehicle. If you have collision coverage you may seek to recover the money from the other driver and make the repair without involving your insurance company, or you may seek repair through your own collision coverage subject to the subrogation rights of your insurance company. Nothing in that changes anything you have been told so far.
    Quote Quoting rblevi01
    He also said that subrogation DOES NOT put my insurance company in any better position to collect money from the liable party's insurance.... He tells me there is nothing in law that states my insurance collects from liability first.
    He's correct that there's nothing in the law that says that the insurance company's subrogation claim must be paid first. However, if you read your insurance contract you will find that you both agreed to give the insurance company priority for any funds that may be reached for purposes of subrogation, and that you also agreed to do nothing that would prejudice their ability to subrogate. As a practical matter, if you somehow convince the at-fault driver's insurance to give you money for depreciation of your vehicle resulting from the accident damage, you can expect that your insurance company will demand that you pay that money to them pursuant to your contract with them.

    From the sample insurance contract linked earlier in the thread:
    Quote Quoting Our Right to Recover Payment
    A. If we make a payment under this coverage and the person to or for whom payment was made has a right to recover damages from another, we shall be subrogated to that right. Further, the execution of a covenant not to enforce judgment by the injured party shall not preclude us from pursuing our right to sue for or otherwise recover any payment made under this coverage from anyone else who may be liable. The person to or for whom payment was made shall do:

    1. Whatever is necessary to enable us to exercise our rights; and

    2. Nothing after loss to prejudice them.

    B. If we make a payment under this coverage and the person to or for whom payment is made recovers damages from another, that person shall:

    1. Hold in trust for us the proceeds of the recovery; and

    2. Reimburse us to the extent of our payment.
    Quote Quoting rblevi01
    He said when the car is fixed to file a claim....
    File a claim with whom, for what?

    If your lawyer is prepared to sue the at-fault driver for you if that driver won't compensate you for your unrecovered losses over the policy limit, you can certainly discuss that possibility with him -- but on its face, the suggestion to "file a claim" doesn't make sense. (File a claim against the driver in small claims court? But for that you wouldn't need a lawyer.)

    It is going to do no good to file a claim with the at-fault driver's insurance if they have already paid out the policy maximum. It's also going to do no good to file a claim with your own insurance policy for depreciation when, as a matter of contract, you have no basis to recover depreciation from your own insurance company.

  7. #7
    Join Date
    Jul 2007
    Posts
    5

    Default Re: Liability V Collision V Gap V Total Loss V Forced Repair

    It did not "feel" right to me that I could somehow get paid before the insurance company. I figured there would be some way my insurance would get the money first. This all sounds correct and I think that I am going to loose a lot of money even though I have done all things proper. That is, having collision and Gap and not being at fault in a wreck or even having a ticket. You know what is the funniest of all? If they had not caught the hit and run driver with insurance, then I would have been fully compensated under NC law. Thanks all that participated! I appreciate the feedback. I'll file a DV claim with the liability carrier for whatever is left, if any. This has been a great education in that you think you are covered but can be very surprised. For me, this will put me out of the new car market, period. Just too much risk even with insurance.

  8. #8
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    Mar 2013
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    Default Re: Liability V Collision V Gap V Total Loss V Forced Repair

    I thought this was legal forum and not a philosophical discussion about who has it worse. Under the "worse things can happen" clause of your life's philosophical policy, no one should post to the forum and you should never respond. I mean unless a person has lost everyone they love, and are on their deathbed in the worst pain imaginable, and post just before they die, then you could always say "it could be worse". Once that person does post, your response will not be read because they will have just died.
    Yes, this is a legal form. But sometimes I wax philosophical when somebody is having difficulty accepting an explanation or lamenting his situation instead of focusing on the legal aspects. My apologies if that didn't sit well with you.

    Ok, silliness out of the way, I have a legal question if there is anyone here that answers them. This would be specific to North Carolina.
    That's what I've been doing. Answering your legal questions.

    I called a attorney about my case and he spoke with me a long time for free although I wanted to buy some of his time. He tells me it is my insurance's responsibility to fix my car.
    He's right.

    He also said that subrogation DOES NOT put my insurance company in any better position to collect money from the liable party's insurance. It did not "feel" right to me that I could somehow get paid before the insurance company. I figured there would be some way my insurance would get the money first. This all sounds correct
    You haven't addressed the subrogation timeline before now so here's how it works. FIRST, your insurance company pays to repair your car. As a result, your insurance company is subrogated (gets the right) to any reimbursement from the responsible party, generally from his insurance company.

    I'm guessing here (and you can correct me if I'm wrong) but I think your confusion stems from perhaps discussing your options with claims people and learning that the other driver's insurance is one way and your own insurance is another way.

    He said when the car is fixed to file a claim and if denied he will take the case.
    Echoing Mr K - what claim? Once you collect from your insurance company you have no claim against the other party's insurance because their policy will be exhausted once they reimburse your insurance company (if your repairs reach $25,000) and you have no further claim against your own insurance company once your car is repaired because there is no diminished value coverage on your policy.

    He tells me there is nothing in law that states my insurance collects from liability first.
    That doesn't make any sense because there is no subrogation until your insurance company pays out money for your claim.

    This is contrary to many posts I have read, so I wonder if this is something specific to NC. I am ready for the typical response here that I talked to an attorney, blah, blah, blah, and so on. I am just looking for a second opinion here in my spare time. When the repair is made and if my claim denied, then of course I will seek legal advice and pay for it. I am just interested to see what people think here if there are any constructive comments.
    Other than my brief lapse into a philosophical comment, you've had nothing but constructive comments. You've had an in-depth analysis of your policy as well as the legal aspects of a negligence claim.

    You know what is the funniest of all? If they had not caught the hit and run driver with insurance, then I would have been fully compensated under NC law.
    There is no such law in NC. There is only your policy, which has been approved by NC under variety of insurance laws.

    You really should pay closer attention to the terms and conditions of your policy.

    Go back to page 7 of the policy and read the definition of "Uninsured motor vehicle" specifically:

    "3. Which, with respect to damages for bodily injury only, is a hit-and-run vehicle..."

    That means that there is no coverage in Uninsured Motorists Coverage for damage to your car by a hit-and-run driver, there is only your Collision coverage which pays for the lesser of the cost to repair or the ACV of the car.

    I'll file a DV claim with the liability carrier for whatever is left, if any.
    Yes, that would work if your car is repaired for less than the liability carrier's $25,000 policy limit.

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