Frame Damage Contributes to Diminished Value
Filed under: Body Shop, Diminished Value, Frame, Insurance Companies, Original Equipment (OEM), Salvage Parts, Third Party Claims, West Virginia
I was recently in an auto accident that was not my fault. I am dealing with another person’s high risk insurance company. I would like for my vehicle to be totaled as there is extensive frame and suspension damage, and I use the vehicle as a towing vehicle. The insurance company refuses to do this because the damage is less than 75% of the vehicle’s value.
Can I make a claim that for the diminished value as part of the initial claim when fixing the vehicle or do I have to wait until the insurance company fixes it? I will not be keeping the vehicle and suspect I am going to take a major loss on it. I also wonder if I can demand a new frame rather than just fixing the current one? They were quick to send me a check with the estimate, but I have returned the rental car and am not agreeing to anything without thinking my options through!
Thank you for any information you can give me in proceeding. This is my first wreck and is all very new to me!!
Amber
St. Albans, WV
David Williams writes:
You have a right to be distrustful of the insurance company, Amber. While they are quick to get a check in the hands of a claimant after an accident, as they did in your case, often the upfront money they shell out is insufficient to buy the entirety of collision repairs needed to put a car in preloss condition.
Consumers from one end of the country to the other have, for years, been shorted millions of dollars on insurance claims they rightfully had coming because the insurance company’s initial offer was insufficient and they didn’t know they had the right to demand more money.
When insurance adjusters arrive to settle claims on damaged automobiles they are, most always, instructed to write only damage that can be seen easily without pointing out secondary or hidden damage. So, if consumers are unaware of the fact, as most are, that all accident damage has not been included in the adjuster’s initial appraisal, they are also unlikely to know that more money should be paid to settle their insurance claim. Pure and simple, insurers, in my opinion, perpetrate a fraud on the public that allows them to reap unjust profits by paying only a fraction of what is truly owed on the majority of insurance claims, and they are rarely taken to task for it.
High risk insurance companies are among the worst underpayment offenders because they underwrite a captive audience – people who can’t buy insurance from standard carriers. Because these companies insure people who are accident-prone, those who have a poor credit rating, or offences such as drunk driving on their record, high risk companies can treat claimants inadequately without fear that they will go elsewhere or retain a lawyer to challenge them. Their options are often very limited.
What you may not know is that you do not have to deal with the negligent party’s insurance company. You have no insurance contract with them; they did not cause damage to your car; and they don’t owe you a dime even though they are making you an offer to repair you car. Stay with me here…
The negligent party’s insurance company has entered the picture to protect the losses of the person they insured – the driver that caused your damages. The bottom line is that they owe HIM, not you. In fact, they owe him ONLY AFTER he has suffered a financial loss or has had a judgment awarded against him. And, until he pays restitution to you for the damage he caused or a court grants a judgment in your favor, he hasn’t actually suffered a loss for which the insurance company becomes responsible.
Moreover, you don’t have to get your car fixed if you don’t want to. The negligent driver still owes you for the full value of damages he caused and you can spend it on anything you like as long as you don’t owe money on your car.
Letting the insurance company know upfront that you will be filing a diminished value claim may cause them to rethink their offer of repairing damage to your car. They may decide the DV and repair bill together would push your car over the total loss threshold. On the other hand, this may backfire if they tell you to resolve the claim through your own insurance, and your policy excludes diminished value coverage.
While you can let the insurer know your intent to file a diminished value claim before work begins on your car, the diminished value loss cannot be determined until after repairs are complete. To obtain the value of a car one has to assess its condition. In fact, condition is one of the biggest factors in determining a car value, and the condition of your car can go up or down considerably depending on the overall quality of the repairs, the type of parts used and the workmanship performed.
When a frame is replaced instead of repaired on a vehicle the diminished value might increase or decrease depending on a number of factors. Generally speaking frame replacement would make the vehicle safer to drive in that in a subsequent crash the new frame will retain its ability to crush predictably as the carmaker intended since in its new condition it has never been subjected to damage. This might not be true of a repaired frame that has been bent, stretched, heated and hammered back into shape.
But there are problems with replacement of a vehicle’s frame, too. Brackets for mounting shocks, engines and a variety of other componants are often installed using special fasteners not available in the aftermarket. Body shops often use hardened bolts in their place without incident. The problem is that while they may function sufficiently, they look different – a dead give-away that the vehicle has had major work at some point in its history. This causes many buyers to shy away and vehicle values to plummet.
Additionally, new replacement frames have no VIN numbers stamped on them. And, if your car were inspected and the frame had no VIN stamped on it, it would only be logical for law enforcement to assume the numbers had been ground off and the frame had been harvested from a stolen vehicle. Sure, given time and proper paperwork you can prove this isn’t the case. But it could get your car impounded and cause you major headaches until you successfully prove you innocence. Who want headaches like that looming on the horizon?
Purchasing a used frame doesn’t solve this issue any better in that the number stamped onto the used replacement would be the VIN from the donor car, which wouldn’t correspond to the VIN of the second car on which it is being installed. Thus, vehicle owners sporting used replacement frames in a number of states are required to get inspections, carry paper work to prove the frame wasn’t stolen and have the title noted with a secondary VIN. And while the vehicle might be safer to drive, this issue of proper documentation could cause the car’s value to plummet just as it would had the frame been repaired.
So, there you have it, Amber. You have a lot of choices to make. For the most part there are no right and wrong answers. It’s all a matter of what you feel comfortable with. If you choose to have your vehicle repaired we suggest you initiate a repair contract with the shop to better your chances of not being cheated. While there are competent and honest repair shops, these are the exception, not the rule.