North Carolina Diminished Value Law
Under GS 20-279.21(d1) a quote or letter of diminished value from a new/used car dealer IS NOT ACCEPTABLE. The ONLY person who can appraise your vehicle for diminished value is an appraiser who is licensed by the North Carolina Department of Insurance as a "motor vehicle damage appraiser."
11 NCAC 04 .0421 HANDLING OF LOSS AND CLAIM PAYMENTS
(a) The Commissioner shall consider the failure by an insurer to adhere to the procedures in this Rule concerning loss and claim payments as prima facie evidence violation of G.S. 58-63-15(11) when such failure is so frequent as to indicate a general business practice.
(5) If a release or full payment of claim is executed by a third-party claimant involving a repair to a motor vehicle, it shall not bar the right of the third-party claimant to assert a claim for diminution in fair market value pursuant to G.S. 20-279.21(d1) caused by the accident and could not be determined or known until after the repair or attempted repair of the motor vehicle. This claim shall be asserted within the statute of limitations set forth in G.S. 1-52(16).
Insight to G.S. 20-279.21(d1) Diminished Value Claim Process
G.S. 20-279.21(d1) has been broken into sections for you to have a better understanding of the law and steps needed in filing your diminished value claim with the at-fault auto insurer. After reading and you still find yourself confused or have questions, do not hesitate to call Danny Wyatt at 704-216-0081 to have your questions answered.
(d1) Such motor vehicle liability policy shall provide an alternative method of determining the amount of property damage to a motor vehicle when liability for coverage for the claim is not in dispute. For a claim for property damage to a motor vehicle against an insurer, the policy shall provide that if:
(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....
(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,....
Twenty-five percent (25%) of the fair market retail value of the vehicle: This is where many auto insurers totally mislead the claimant stating: "since the repairs did not meet or exceed 25% of the vehicle value, you do not have to disclose damages, so we do not owe you diminished value." This is total BS, there is no North Carolina law that will support this comment. When the seller has knowledge of damages they cannot make any untrue statements in misrepresenting the condition of the vehicle; this would be considered as fraud. So no matter the amount of damages (5% -10%) under GS 20-279.21(d1) you do have a right for diminished value. This is where an ethical appraiser will explain the cost vs benefit in hiring an appraiser and the possible diminished value dollar amount return.
(3) 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,
The appraisers shall then appraise the loss: It is common practice by insurance companies to claim their disinterested appraiser appraised the loss at $X amount and that that is all they will pay. DO NOT let this statement deter you! The auto insurer is doing what they can to keep their appraiser from discussing claim with your appraiser. You have to remember GS 20-279.21(d1) is in force and the auto insurer has to allow their appraiser to discuss the amount of loss with your appraiser. It may take forceful action by filing complaint against the auto insurer to the NCDOI to make it happen, but it will happen.
Note: It is nothing uncommon for the two appraisers to be thousands of dollars apart and the negotiating process begins. When the two appraisers cannot reach an agreement then it is time for an umpire to decide.
3 Continue .... 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.
Selecting an umpire: If the appraisers are unable to agree on an umpire, 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. When the claim goes to umpire both the claimant and auto insurer split umpire fee. Umpire fees range from $125 to $200 for each side.
(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."