Understanding how diminished value claims work after a car accident in Nebraska
This FAQ-style guide explains how diminished value claims typically proceed under Nebraska law, what evidence you need, how insurers usually respond, and practical steps you can take. This is educational information, not legal advice.
Detailed answer: the step-by-step process
After a crash that damaged your vehicle, you may recover the cost to repair the damage. In addition, you may be entitled to recover the vehicle’s diminished value — the drop in market value the car suffers after an accident and repair. In Nebraska, diminished value claims are generally handled as property-damage claims against the at-fault driver’s insurer (a third-party claim). The process below shows how these claims typically work.
1. Confirm liability and get the vehicle repaired
– Gather the police report, witness statements, and photos of the crash scene and vehicle damage.
– Get a written repair estimate and keep all repair invoices and parts receipts. Repairs alone do not prove diminished value, but they are essential supporting evidence.
2. Establish the vehicle’s pre-loss and post-repair market values
– Pre-loss value: determine the fair market value immediately before the accident. Use reliable sources such as vehicle guides (Kelley Blue Book, NADA), dealer listings for comparable vehicles, or a professional appraisal.
– Post-repair value: determine the fair market value after repairs. An independent appraiser, dealer statements, and comparable vehicle listings help show reduced resale value tied to the accident history and repairs.
3. Calculate diminished value
– Simple calculation: diminished value = pre-loss market value − post-repair market value.
– Insurers and appraisers sometimes use different methods (guideline percentages, “17c” formulas used in some states, market comparison methods, or a certified appraisal). Use an independent appraisal if you suspect the insurer’s number is too low.
4. Present a written demand to the at-fault driver’s insurer
– Send a demand package with the police report (if available), photos, repair invoices, proof of pre-loss value, the independent appraisal (if you have one), and a clear statement of the diminished value amount you seek and how you calculated it.
– Keep copies of all communications and track dates. Nebraska insurers are subject to state rules on fair claims handling and can be reported to the Nebraska Department of Insurance if they act unfairly.
5. Negotiation and dispute resolution
– The insurer may accept, reject, or make a counteroffer. Negotiation often follows. Be prepared to explain your valuation method and provide comparables.
– If negotiations fail, options include hiring an attorney to demand payment, submitting the dispute to binding or non-binding appraisal/arbitration if available, or filing a claim in court (small-claims court or civil court). Courts look at evidence of market loss, appraisals, and repair history.
6. Settlement or court
– Many diminished value claims settle. If you litigate, expect discovery requests (repair records, vehicle history, appraiser testimony) and possibly an independent appraisal ordered by the court.
Hypothetical example (to illustrate)
Suppose your 2015 sedan had a fair market value of $10,000 right before a rear-end collision. Repairs cost $3,000 and were completed. After repairs, comparable clean-market listings show similar 2015 sedans sell for about $8,200 because buyers avoid cars with accident histories. Your diminished value is $10,000 − $8,200 = $1,800. You send the at-fault insurer a demand for $1,800 with repair invoices, before-and-after photos, and comparable listings. The insurer may counteroffer, accept, or deny; if denied, you could get an independent appraisal or pursue the matter in court.
Who pays diminished value?
– Primary route: the at-fault driver’s liability insurer pays diminished value as part of a liability property damage claim.
– If you work through your own insurer (first-party), the insurer might pay repair costs and then try to pursue the at-fault insurer through subrogation for diminished value. Check your policy — some first-party policies include diminished value coverage and some do not.
Timing and practical notes
– Act promptly. Preserve evidence, get timely appraisals, and make your demand while comparables remain relevant. Also note that statutes of limitation for property damage claims limit how long you have to sue; consult a lawyer or check state resources for deadlines.
State resources
– Nebraska Department of Insurance: https://doi.nebraska.gov. You can find consumer guidance and complaint procedures there.
– Nebraska Legislature website (general statutes and statute search): https://nebraskalegislature.gov.
Disclaimer: This is general educational information and not legal advice. For advice about your specific situation or to protect deadlines and rights, consult a licensed attorney in Nebraska.