Monday, August 3, 2015

Is my car worth less after an accident?

It really depends on a number of factors.  

The technical term for this loss is accelerated depreciation (in Canada) and diminished value (in the US)

Here are a five factors:

  1. Severity  - The final cost to repair a car doesn't always signify substantial damages.  You have to dig deeper than the total final cost.  We have seen a Porsche that had $11,000 brake rotors.  You really need to understand the damages.
  2. Structural damage?  Understanding if a vehicle has sustained structural damage is a bit more of a complex situation.  Structural damage is more than just frame damage. In today's age of Unibody construction, there is more than just the frame rails to consider.  Good body shops will go through the repairs to explain if there was any structural damage.
  3. The market - Depending on the market, an accident may or may not have an impact.  If you have a mass produced vehicle that has sustained damages of $10,000 it may be more difficult to sell, due to supply and demand.  A 2012 Dodge Grand Caravan with a $10,000 may be more difficult to sell due to the supply and demand.  If there are 500 of these vehicles for sale in the exact same color / option combination then why would a buyer pay the same for a previously damaged version.
  4. Confidence - Confidence plays a large role when determining how much a car is worth.  If your vehicle is damaged and you do not understand the damages, it will be difficult for most to sell. Putting the damages into context is an important part of maintaining your vehicle's value. Understanding the breakdown of the repairs is always important.  Some insurance companies will include the cost of the vehicle rental into the total cost of repairs.  In some instances, this can be upwards of $1000. 
  5. Quality of repairs - If the repairs are apparent, it may be more difficult to sell a vehicle for top dollar.  Is it not only the responsibility of the body shop completing the repairs to return the vehicle to pre-accident condition, it is your responsibility as well.  It is unfortunate when accidents occur and it is even more frustrating when the accident was not your fault.  But you still need to do what you can to mitigate any losses.  Making sure the body shop repairs your vehicle properly is ultimately your responsibility.  If your body shop will not fix the vehicle properly, there are ways to involve the insurance company to get your car fixed.
If you've been in an accident and you need help, feel free to give us a call.  We are here to help!


Wednesday, July 1, 2015

Accelerated Depreciation / Diminished Value FAQ

Accelerated depreciation FAQ

What is accelerated depreciation?

Accelerated depreciation, also known as "diminished value", is what happens to a vehicle after it has been damaged and then repaired.  Depending on the value and type of repairs, this depreciation can fluctuate.  For an in-depth explanation Click here.

Am I eligible to claim accelerated depreciation?

The laws and processes in which accelerated depreciation is determined varies depending on the location of the accident.  The following information pertains to British Columbia only.

The 2 components of an eligible accelerated depreciation claim are:
·          You are not at fault for the accident
·          There was another driver involved who is at fault.  There must be another person to name in the case of a lawsuit.  We have not seen success in accidents involving animals, hit and runs or vandalism.

Where do I start?

This depends on your situation, listed below are a few scenarios and the associated paths.

Scenario 1 - Your vehicle was involved in an accident where the following apply:
o    you were not at fault,
o    you were not injured
o    your insurance company is WILLING to pay accelerated depreciation

In these situations, you will need to hire an expert to assess the losses and provide a report which is given to your adjuster (our services). Ideally, your adjuster will accept the losses and compensate you for both the losses and the cost of the report.  We have seen this happen before, as recently as last week (June 2015).

Scenario 2 - Your vehicle was involved in an accident where the following apply:
o    you were not at fault,
o    you were not injured
o    your insurance company is UNWILLING to pay accelerated depreciation

There is where you would need to follow these steps - Do it yourself - Suing for accelerated depreciation

Scenario 3 - Your vehicle was involved in an accident where the following apply:
o    you were not at fault,
o    you were injured
o    you have chosen to hire a lawyer

Your personal injury lawyer would represent your accelerated depreciation claim at the same time as your personal injury claim.  Make sure your lawyer understands that accelerated depreciation is an important part of your claim, as some will not represent property losses

Scenario 4 – Your vehicle was involved in an accident where the following apply:
o    you were not at fault
o    you were injured
o    you have chosen not to hire a lawyer

In this situation, your adjuster may choose to accept an accelerated depreciation claim to minimize the potential risk of a personal injury lawsuit. Please refer to Scenario 2.


Online articles related to Accelerated Depreciation in Canada

Precedent Cases

The Fournier Auto Group Ltd. Provides Accelerated Depreciation reports:
Services - 

Sample Report - Sample Accelerated Depreciation Report
For a free consultation call 778-908-2804 or Click here to submit a “Request for a free consultation with an IVE"

How to make a claim - Click Here

Saturday, June 20, 2015

Success Story - June 2015

Today I spoke with a client whom I had provided an accelerated depreciation report for his Toyota Tundra. He provided the report to his insurance adjustor and they not only accepted it without litigation, they paid the full assessed loss and the cost of the report.

Friday, May 22, 2015

How to mitigate accelerated depreciation

Education is the easiest way to mitigate accelerated depreciation.  Buying or selling a vehicle can be intimidating for most.  Add an accident to the mix and it just complicates it even more.  There are few tools that I can see would help minimize accelerated depreciation.

1 - A clearly articulated report on the damages with images that communicates to people outside of the auto industry.  Understanding the damages makes a huge difference. This will also help when selling a vehicle.  It has been my experience that there is very little trust in the world of slinging new and used vehicle.  Documents from ICBC speak for themselves.

2 - A better-defined declaration process.  The majority of people I meet understand that in BC the declaration is $2000 per incident.  But the reality is that if your vehicle has an accumulation of damages over $2000, you must declare your vehicle as having a $2000 declaration.  Check out the transfer form, it even says "cumulative".

Having some perspective regarding damages will help minimize the need to sell a vehicle at a lower price.  When it comes to selling a vehicle if you are uncertain due to a lack of knowledge, it will impact what you are able to get for your vehicle.

If you have questions, we'd love to help
Services Click Here