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Complaint 11 of 24 in "Offering Too Little Money"

Insurance Carrier: Liberty Mutual
State: Maryland

Consumer Complaint:

Filed a claim in Aug. Because of the insured driver that hit our car, we have suffered substantial loss on the value of our car. I filed a deminished value report to the insurance company for the decrease in cars value (which was estimated at approx $5,100) and they aren't trying to give us anything! This is a valid loss and were trying to trade the car in. Please email me (preferred) advice on what to do so that we can be compensated. Thank You.


Insurance Expert Answer:

Claims for "diminished value" are very controversial. Insurance companies resist them in dealing with their own insureds (and check the policy as such claims may be specifically excluded) and certainly resist them when dealing with 3rd party claims. There is no statutory or case law on point in many states, especially when no loss has been "recognized". For example, suppose I'd bought Google stock at $700 in January and it now is selling at $309. I'd have $391 per share in diminished value. However, I couldn't benefit from that loss in value on my income taxes this year unless I sell the stock. Then the loss is recognized. If I hold on to it might be up to $1,000 when I finally sell, so there would be no loss. If the car is fully repaired, and you continue to drive the car for 20 years you've not incurred any loss. On the other hand, if you immediately sell the car, and get $5k less than another owner of an identical car that had not been in an accident would get, you'd have recognized a loss of $5k. We don't blame you for trying, but our sense is you're going to have an uphill battle unless your state has clear laws and precedent obligating the 3rd party company to pay the diminished value claim on a unrealized loss.