Accelerated depreciation is not a new legal issue. I think it’s fair to say, though, that some lawyers have had experiences with these claims and others have not.
Accelerated depreciation is what happens to the value of a vehicle when it has been damaged in an accident and then repaired. Let’s take, as an example, a 2016 Toyota Rav4 worth $36,000 and sustains $15,000 in damage. If the owner chooses to sell the vehicle after it is repaired, the transfer documentation include a declaration that it has sustained more than $2,000.00. This will alert a purchaser to the fact that they are purchasing “damaged goods”, and there will be a negative impact on the vehicle’s value.
ICBC has, historically, been very resistant to these claims. Their reasonable concern is that if these claims are readily acknowledged and paid, the floodgates will open.
Many of those collisions result in damage costing more than the $2,000.00 threshold. Most have no idea of this notion of “Accelerated Depreciation”, and those who do know about it have no idea how to approach that aspect of the claim.
As I talk with customers, a pattern emerged. Many had conversations with personal injury lawyers who advised them that they would have to pursue their claim through Small Claims. With only a few hundred, or a few thousand dollars of loss, most were not inclined to enter into the murky unknown of a lawsuit and the claim would die.
The purpose of this article is to outline the process for claiming accelerated depreciation without the small claims process.
In my conversations with people across Canada, I found it interesting that ICBC has been the most progressive insurance company with regards to accelerated depreciation claims.
Although no company policies have been publicly published, there has been a shift in how ICBC deals with these claims. It is the excellent work of those personal injury lawyers who have included accelerated depreciation losses to claims that has undoubtedly resulted in this shift, most recently Rutter vs Adams which awarded accelerated depreciation sustained to a Toyota Matrix.
My personal experience, working as an advocate for many clients for whom accelerated depreciation is their only crash related loss, is that there is a divide in ICBC with regard to how these claims are being handled.
There are particular situations where the likelihood of getting paid accelerated depreciation at the adjustor level is quite good, and there are situations where it is less likely. We will focus on the situations/circumstances where the likelihood of success are greatest.
The below circumstances are the ideal elements, in which, I have continually seen the greatest success in achieving fair, financial compensation for the accelerated depreciation loss without the need for a law suit:
1. Liability is not at issue, i.e. 100% of fault was assessed on an ICBC insured driver
2. The claimant owns the vehicle and or is financing the vehicle (not leasing)
3. The vehicle does not need to be sold but if it has been sold this helps to solidify the claim
4. There may or may not have been an injury but the claimant is not pursing an injury claim with a lawyer
If the above requirements have been met, the claimant may simply inform their adjustor that they will be pursing an accelerated depreciation claim. According to the ICBC Material Damage Manual:
If the claimant indicates a concern, either to the adjuster, estimator, or Express Repair participant, that the vehicle value may have diminished as a result of the accident, the adjuster, estimator, or Express Repair participant must immediately notify the Manager Estimating Services or designate.
At this point the adjuster or designate will inform the client they can will need to quantify the loss. That’s where an independent appraiser can come in.
A customer can expect to pay in the neighbourhood of $200 - $560 plus costs for an appraiser’s researched opinion of the value of the Accelerated Depreciation claim. This expense can include a physical inspection of the vehicle, review of the documentation related to the damage sustained and the repairs, and careful market research.
Once ICBC has been provided the appraiser’s opinion, ICBC will assess the valuation independently and provide their offer. At the time of this article, it is my understanding that there is no set protocol or procedure mandated by ICBC to determine the loss, but it is up to the adjuster to determine their own assessment.
Independent Vehicle Examiner
The Fournier Auto Group