Diminished Value

I was rear ended a few weeks ago. My insurance company told me I could either go through them and the insurance company of the driver-at-fault would pay them, or I could go through the other insurance company (Geico). The process by which your insurance company collects a debt owed on your behalf is known as subrogation. I chose to go through my own insurer because I thought it would be easier. In rectrospect, it may have been easier to go through Geico. My insurance didn’t cover the full cost of a rental, at least when the other driver is at fault. And I was told that going through your own insurance can raise your rates, though this didn’t happen.

A few days after I filed a claim with my insurer, I was contacted by Geico asking me for information about the accident. This was probably due to the other driver filing a claim. I didn’t understand at the time, but Geico had basically initiated their own claims process for me. So now there were two claims for the same accident: one through my insurer and one through Geico. The damage estimate by the auto-body shop that works with my company was about $2000. Geico had done their own estimate, which was done by me taking photos of the damage and sending them the photos. Their estimate was about $800. The reason for the discrepancy was because Geico’s estimate only accounted for replacement of the bumper cover, and not the entire bumper. I should mention that the entire right side of the bumper was destroyed, and the backup camera was not working. The final cost to replace the bumper was about $2500, more than three times Geico’s estimate. There was also the issue of the rental vehicle which Geico had authorized for two days instead of the week the auto-body shop needed.

Once Geico’s estimate was complete, I immediately started receiving texts and emails telling me I needed to accept the $800. I was pretty upset at this point. I contacted the Maryland Insurance Administration. After going back and forth with both insurance companies, the auto-body shop, and the MIA, I finally realized that there were two separate claims processes. According to what I was told by the MIA, Geico’s initial estimate would be revised once the car was in the shop. The shop would have to send a supplemental damages form to Geico to cover the remainder, and this is all part of the process. Why Geico wanted to send me a check still doesn’t make any sense to me. I would think they should deal with the auto shop directly. By this time, Geico had already mailed me a check, which I never accepted. Since I was going through my own insurance company anyway, I told them to cancel the check.

While this was going on I had left Geico a message telling them I wanted them to cover diminished value. Maryland is a diminished value state, meaning that insurance is required to pay for the loss of value to your vehicle. When you go to sell your car, the dealer will get a report from the VIN number that will have any accidents listed. Accidents, even if the car has been fully repaired, will make your car worth less. Insurance companies don’t tell you this of course. You have to know to ask.

I didn’t actually care about diminished value. I wanted my car fixed without having to fight over it. I was trying to use diminished value as tool to make the insurance company behave. Someone left me a voicemail about it. After my vehicle was repaired, I called back and left a voicemail. It wouldn’t hurt to look into it. Due to the crazy car market right now, my car’s value was estimated at around $10000 even though it’s 9 years old. I figured the accident probably knocked off something like $1000 in value. Sure enough, they got back to me with the following:

In reviewing a diminished value claim, we consider a number of factors and review each claim based on its own individual merits. The damage in this accident was minor and non-structural in nature, which should have been repaired back to pre-accident condition.

Based on the factors outlined above, and lack of supporting documents to show a diminished value, we are not moving forward with the claim at this time. We expect that this will satisfy the requested information, however if you have any additional questions, feel free to contact our team directly.

Essentially what they are saying is, you will have to sue us to get diminished value. Damages of $2500, which would be more than half the value of my vehicle in a normal car market, are not minor. I strongly suspect that they send this letter or one very similar to everyone or nearly everyone regardless of circumstances. The cost to get an appraisal is several hundred dollars. Once you throw in court costs, it’s unlikely I would get very much, and I could even end up with a loss. The only way it would make sense to purse this would be if I had a relatively new luxury vehicle. They know that, and that’s why they put the onus on me to sue them.

I walked away from this accident without a scratch. My vehicle was repaired, though the lack of communication put me through some grief. In this case, I decided it’s best to let it go. Even though I briefly considered selling my car, it would really be too much of a pain to find another one.

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