Diminished Value in North Carolina                      

 

This page is currently under re-construction in order for those who are looking to file a diminished value claim will have a better understanding how to file a diminished value claim with the at-fault insurer.

Diminished Value

Diminished Value on the internet is being described as "the difference in the market value of a vehicle without an accident history and the market value of the same vehicle with accident history."

North Carolina Diminished Value Law G.S. 20‑279.21(d1)

 

In order to under stand how to make your diminished value claim read closely.

GS 20-279.21(d1) was written by legislators to address an alternative method diminished and more cost effective way in settling a diminished value claim, versus the more expensive way of suing the at-fault driver in civil court. Under this law a quote(s) from a new/used car dealer of diminished value IS NOT ACCEPTABLE; the ONLY PERSON who can appraise your vehicle is an appraiser who in licensed in North Carolina as a "motor vehicle damage appraiser." So do not waste your time talking to the new/used car dealer unless you are dead serious on trading your car.  G.S. 20-279.21(d1) has been broken into sections with notes so to have a better understanding of the law and steps needed in filing a diminished value claim in North Carolina. ​

(1) The claimant and the insurer fail to agree as to the difference in fair market value of the vehicle immediately before the accident and immediately after the accident; and

Note: You the claimant and the insurer fail to agree as to the difference in fair market value of the vehicle immediately before the accident and immediately after the accident. Few vehicle owners have no clue what the value of their damaged vehicle is

(2) The difference in the claimant's and the insurer's estimate of the diminution in fair market value is greater than two thousand dollars ($2,000) or twenty-five percent (25%) of the fair market retail value of the vehicle prior to the accident as determined by the latest edition of the National Automobile Dealers Association Pricing Guide Book or other publications approved by the Commissioner of Insurance, whichever is less, then on the written demand of either the claimant or the insurer, each shall select a competent and disinterested appraiser and notify the other of the appraiser selected within 20 days after the demand. The appraisers shall then appraise the loss. Should the appraisers fail to agree, they shall then select a competent and disinterested appraiser to serve as an umpire. If the appraisers cannot agree upon an umpire within 15 days, either the claimant or the insurer may request that a magistrate resident in the county where the insured motor vehicle is registered or the county where the accident occurred select the umpire. The appraisers shall then submit their differences to the umpire. The umpire then shall prepare a report determining the amount of the loss and shall file the report with the insurer and the claimant. The agreement of the two appraisers or the report of the umpire, when filed with the insurer and the claimant, shall determine the amount of the damages. In preparing the report, the umpire shall not award damages that are higher or lower than the determinations of the appraisers. In no event shall appraisers or the umpire make any determination as to liability for damages or as to whether the policy provides coverage for claims asserted. The claimant or the insurer shall have 15 days from the filing of the report to reject the report and notify the other party of such rejection. If the report is not rejected within 15 days from the filing of the report, the report shall be binding upon both the claimant and the insurer. Each appraiser shall be paid by the party selecting the appraiser, and the expenses of appraisal and umpire shall be paid by the parties equally. For purposes of this section, "appraiser" and "umpire" shall mean a person licensed as a motor vehicle damage appraiser under G.S. 58-33-26 and G.S. 58-33-30 and who as a part of his or her regular employment is in the business of advising relative to the nature and amount of motor vehicle damage and the fair market value of damaged and undamaged motor vehicles.

(o) An insurer that fails to comply with subsection (d1) or (m) of this section is subject to a civil penalty under G.S. 58-2-70.

1)  You the claimant and the insurer fail to agree as to the difference in fair market value of the vehicle immediately before the accident and immediately after the accident.

Note: "The difference in fair market value of the vehicle immediately before the accident and immediately after the accident," is the true measurements of Diminished Value in North Carolina. When determining the Inherent Diminished Value, the fair market value of the vehicle prior to the accident and the immediate loss in value (damaged /salvage value) needs to be determined first. If one does not do so, determining the Inherent Diminished Value will be rather difficult. A CSI-NC Diminished Value appraisal does include the value of the vehicle immediately before the accident and immediately after the accident.

2)  The difference between your opinion of diminished value and the insurance company’s opinion of the value must be greater than $2,000 or 25% of the fair market value of the fair market retail value of the vehicle prior to the accident as determined by the latest edition of the National Automobile Dealers Association Pricing Guide Book (NADA) or other publications approved by the Commissioner of Insurance, whichever is less...

Note: A CSI-NC Diminished Value appraisal does include the NADA value and ONLY the NADA value.

3)  Then on the written demand of either the claimant or the insurer, each shall select a competent and disinterested appraiser (person licensed as a motor vehicle damage appraiser under G.S. 58-33-26 and G.S. 58-33-30) and notify the other of the appraiser selected within 20 days after the demand. 

Note: Insurance adjusters will try talking on the phone with you and so much will be lost in conversation because you are not recording what is being said to you by insurance adjuster.  have insurance adjuster follow up the phone conversation what is said to you in an email. Also 

 11 NCAC 04 .0420 WRITTEN CONFIRMATION OF ORAL AGREEMENTS

(a) If an insurer, by telephone or otherwise, accepts liability or advises a claimant to have damaged property repaired with the understanding that the insurer will pay or reimburse the claimant, the insurer shall, if requested by the claimant, promptly confirm the understanding in writing. Such writing shall clearly state the responsibility assumed by the insurer for payment of incurred costs.

(b) If so requested by the claimant, the insurer or its representative shall confirm in writing all other oral agreements between itself or its representative and the claimant.

4)  The appraisers shall then appraise the loss. Should the appraisers fail to agree, they shall then select a competent and disinterested appraiser to serve as an umpire.

Note: Both appraisers numbers in loss are always hundreds to thousands of dollars apart; so to settle matters the negotiating process begins, hopefully to agree on the amount of loss where both at-fault insurer and diminished value claimant can live with. If not the next step is selecting an umpire to make the determination. The cost of the umpire will be shared by you and the insurance company.

5)  If the appraisers are unable to agree on a competent and disinterested appraiser, then you or the insurance company may request that a magistrate select the umpire.  The deciding magistrate must be a resident in the county where (a) the accident occurred or (b) the insurance company’s policyholder’s vehicle is registered.

6)  The appraisers shall then submit their differences to the umpire. The umpire then shall prepare a report determining the amount of the loss and shall file the report with the insurer and the claimant. The agreement of the two appraisers or the report of the umpire, when filed with the insurer and the claimant, shall determine the amount of the damages. In preparing the report, the umpire shall not award damages that are higher or lower than the determinations of the appraisers.

7)  The claimant or the insurer shall have 15 days from the filing of the report to reject the report and notify the other party of such rejection. If the report is not rejected within 15 days from the filing of the report, the report shall be binding upon both the claimant and the insurer.

 

When do I file my Diminished Value Claim?

File your claim in a timely manner!

CSI-NC recommends once the at-fault driver’s auto insurer has accepted your collision claim that you file your Diminished Value claim before the repairs are completed. Why? Because you have properly asserted your claim for Diminished Value according to North Carolina insurance code 11 NCAC 04. 042.  

When filing a claim for Diminished Value, CSI-NC recommends to first call the at-fault insurer making them aware that you are filing a Diminished Value claim under North Carolina General Statute 20-279.21(d1) Ask the at-fault insurer if they will accept a Diminished Value Desk Appraisal (meaning no visual re-inspection) or if they require your damaged repaired vehicle to be visually re-inspected. Then request that your verbal claim is followed up in writing.  (11 NCAC 04 .0420) by an email acknowledging your Diminished Value claim has been made or any possible denial of your claim. 

Who can appraise my loss & does the appraiser need to be certified / licensed?

In North Carolina when filing a diminished value claim with at-fault auto insurer the appraiser you and the at-fault auto insurer chooses must be licensed as a NC Motor Vehicle Damage Appraiser. (North Carolina General Statute 20-279.21(d1) Appraisals from CARMAX or any other new/used-car manager of a new-car dealership of the vehicle’s make means nothing

The Amount of Diminished Value Varies

Because every vehicle is different, the amount of Diminished Value varies accordingly, and the following factors listed below yet not limited to need to be considered:

  • Year model, make and mileage

  • The vehicle’s value, overall condition before the accident and estimated salvage value

  • Severity of damage –  Cosmetic to Structural

  • Type of parts used – Aftermarket (non-OEM) – Salvage (LKQ) – OEM

  • Cost of repairs

  • Percentage of damages to vehicle value / Disclosure of damages

  • Prior accidents / repairs

  • Repair Quality

How do insurance companies calculate Diminished Value?

Most insurance companies use a diminished value calculation known as “GA 17C Formula.” This diminished value calculation was first implemented by State Farm in a Georgia first party lawsuit. The court in that case (Mabry v. State Farm) approved its use–in that case–and as a result of the low value produced by the formula, most insurance companies have adopted it or a close variant. This formula is even rejected  by the Georgia Insurance Commissioner. However, many insurance companies in North Carolina along with their so-called disinterested appraisers are still using this low ball method today or a similar formula even though they may not tell you they are using it.

Can I file a First Party Diminished Value Claim?

In North Carolina a First Party Diminished Value can only be claimed under an Under-Insured Motorist or Non-Insured Motorist. To make this type of Diminished Value claim the following conditions must be met: you are not at-fault and the at-fault driver/ automobile owner liability coverage was exhausted or the at-fault driver/ automobile owner was not insured at time of the accident.

 

If you have a question about Diminished Value, Call CSI-NC at 704-216-0081

CSI-NC offers a FREE Diminished Value Claim review and upon request a FREE PDF Book titled “Signs of a Wreck”  written by CSI-NC owner Danny Wyatt. "Signs of a Wreck" is for the consumer who is not a professional used-car buyer  and shows how to avoid buying a used vehicle that was in a prior accident and repaired. “Signs  of a Wreck” will help automobile owners who had collision repairs done to their automobile spot check the auto-body shop's repairs. “Signs of a Wreck”  was also a two part featured in Collision Magazine Volume 9, Issue 1 2014 which included the crash testing of an inadequately repaired 2004 Subaru WRX. Collision Magazine  is the number one publication for accident reconstruction, traffic investigation and crash research.

For a brief sample reading of “Signs of a Wreck”  just click on the book.  To order Collision Magazine Volume 9, Issue 1 2014, click on the magazine cover.

Diminished Value claims
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