Can diminished value be established pre repairs?

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PostPosted: Wed Jan 20, 2010 1:22 am   Post subject: Can diminished value be established pre repairs?  

My wife and daughter were in a wreck 12/09. We have a Honda Odyssey 2009 (10 months old). We were hit in the rear by someone who didn't have insurance. We then hit the car in front of us. I am using my own ins, (State Farm) for my side.

The value pre-accident is $37,000, damage is $21,000. Have to get to $27,000 (75%of value) for the van to be totaled. I am trying to pursue 2 angles: 1 is get it totaled, almost there; and 2 diminished value.

I am in New Orleans, LA. I know LA does not have any clearly defined DV laws.

My goal is to have it totaled. I will not hang on to the van if I cannot get it totaled. I will trade it in for another Odyssey.

I would appreciate any input. MIke

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PostPosted: Wed Jan 20, 2010 2:27 am   Post subject:   

This is not legal advice but rather options that I might consider, if I found myself in your situation. You should consult an attorney or discuss your policy with someone who is licensed to dispense the contractual meaning, terms, and conditions of a policy of insurance and how it may apply to your own situation.



As I understand it, you can not hold your insurer responsible for any inherent loss of value in your state as I am aware. You can not force your insurer to elect the options which are provided for in your policy. It is always the insurer’s option to, either repair, replace, or pay for repairs. Diminished value has been written out of most policies in the last 20 years on first party claims with the exception of three states.



As I interpret my own policy I understand it to mean the following. When my insurer elects the option to repair (take control of the repair and name the repairer) they are literally repairing the vehicle themselves and assuming all liability. When they are paying for repairs, it is generally understood that they are paying an amount that either they determine the cost should be based on prevailing rates, practices, and data or they are paying based on the invoice provided by your repairer. When my insurer says they guaranty the repairs, they are actually saying, we'll hold our contracted shop's feet to the fire to repair your car and they will be liable and hold us harmless. One has to presume the preceding statement as insurers only pay for losses; they do not physically repair cars or turn a wrench on them.



In my opinion, you should select the shop and your shop should be your advocate for complete quality repairs based on how the manufacturer of your vehicle specifies those repairs are to be contemplated or completed using parts that they state will not harm any warranties that apply to your vehicle. The insurer has a contractual duty to you based on that policy to restore your vehicle to pre-accident condition. As long as both you and your selected shop understand that only you can authorize repairs and that they will repair based on manufacturer standards and it is the insurer that has the duty to indemnify you for your loss and not the repairer, then you could proceed with repairs that might restore your vehicle to a pre-loss condition. Your repairer should not proceed if they feel the amount the insurer has determined to repair your vehicle is insufficient and they have safety concerns.



If you do not have an appraisal clause in your policy and the insurer insists on the vehicle being repaired and the amount was not sufficient to restore to pre-loss condition, then you could have a breach of contract or bad faith claim that only an attorney could advise you on. What you want to be careful of is a repairer omitting charges for services that are legally owed under your contract that could suggest they colluded with an insurer to keep your car from totaling. There are repairers that defer to insurers, who are not repair experts. By deferring to the insurer and not informing them that certain repairs should not be contemplated could result in a vehicle being repaired that should have been totaled. If repairs reach a threshold in most states to that which statutes specify that a vehicle be totaled, repairs should cease and an attempt to discount the quality or safety of the repair should never be considered.



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PostPosted: Wed Jan 20, 2010 3:23 am   Post subject:   

Since the accident happened in LA.... I won't even comment on this. Nothing like some Napoleonic laws to kill the norm.

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PostPosted: Wed Jan 20, 2010 1:29 pm   Post subject:   

Laughing


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PostPosted: Wed Jan 20, 2010 3:35 pm   Post subject:   

Quote:
My goal is to have it totaled. I will not hang on to the van if I cannot get it totaled.




You don't have any control over this, unless what Mike stated may have occured, although rare, it's not completely uncommon. Have you gone over the repair with the shop?You do have the choice in electing to cash settle, take the loss and sell it your self, although thats going to be tough.



Quote:
and 2 diminished value. I know LA does not have any clearly defined DV laws




It does actually, LA is not a state that recognizes DV on 1st party claims.





Quote:
I won't even comment on this. Nothing like some Napoleonic laws to kill the norm.




Why? Pretty standard.
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PostPosted: Wed Jan 20, 2010 4:06 pm   Post subject:   

Quote:
Why? Pretty standard.




It can get quite weird.



http://en.wikipedia.org/wiki/Louisiana_law



"Law in the State of Louisiana is based in part on civil law. Louisiana is unique among the 50 U.S. states in having a legal system partially based on French and Spanish codes and ultimately Roman law, as opposed to English common law.[1] Louisiana thus follows the system of most non-Anglophone countries in the world."



"Great differences exist between Louisianan civil law and common law found in all other American states. While many differences have been bridged due to the strong influence of common law, the "civilian" tradition is still deeply rooted in Louisiana private law and in some parts of criminal law."
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PostPosted: Wed Jan 20, 2010 4:11 pm   Post subject:   

Wow Shocked

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PostPosted: Wed Jan 20, 2010 5:45 pm   Post subject:   

Are saying that this vehicle owner may have met their waterloo?



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PostPosted: Wed Jan 20, 2010 6:07 pm   Post subject:   

Quote:
Are saying that this vehicle owner may have met their waterloo?




Not necessarily, the laws are pretty strange there is all. He won't be able to pursue a DV claim though. I am wondering why he thinks the vehicle is totalled, thats why I asked had he gone over it with the shop. I got asked the other day at a shop that they would be willing to do some things for free to save the vehicle from totalling, which is illegal in MO.
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PostPosted: Wed Jan 20, 2010 6:52 pm   Post subject:   

Something the poster could consider,,,,,,,,

While you may not be able to recover any diminishment of value loss, the IRS allows you to take a deduction on any losses as a result of a casualty property damage that was not covered by insurance if filed appropriately.



Courtesy of the Insurance Consumers Advocate Network

Quote:
Income Tax Deduction ? ? ?

Yes - IF you itemize your deductions, use Line # 19 of Form 1040 - Schedule “A” to Deduct your unrecovered Diminished Value. Assuming you have an unrecovered Diminished Value of $ 2,000 and a tax rate of 20%, you can Reduce Your Tax Obligation by almost $ 400.00 - well more than the cost of the Diminished Value report itself - You can even Deduct the Cost of the Diminished Value Report on Line # 22 of Schedule “A”.



Review IRS Form 1040 - Schedule “A” and Form # 4684 with your tax advisor.


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PostPosted: Fri Jan 22, 2010 9:35 am   Post subject: Total loss  

It is the insurance company who decides whether your car is to be totaled, depending on the value of the car and the amount of damage caused. If the cost of repairs exceeds the worth of the car, it is declared to be a total loss.


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