So, you plan to file a diminished value claim in Alaska because your beloved vehicle was damaged in an accident. It’s a wise decision, considering many people don’t even know that they can recover their losses after a car accident. But there are certain things you must keep in mind while filing an Alaska diminished value claim. Knowing those things would help you throughout the process. Ok, so what are those things? We are here to decode them and have brought an insightful blog for you.
We are starting this blog by deciphering what a diminished value claim in Alaska is. It’s because many people are unaware of diminished value claims, as we said. If you think that you don’t need to read the first paragraph, then jump to the main topic.
Before a diminished value claim, we need to know what diminished value is. Let’s decode both one by one for you:
Diminished value is the reduction in a car’s market value resulting from its accident. This reduction stays, even if your vehicle is repaired with high-quality parts and looks like a brand-new one. It is because although your car looks new, it has an accident history, and now buyers will hesitate to purchase it. The diminished value is also known as a diminution of value in Alaska.
Let’s take an example for a better understanding. Suppose you have a car worth $97,000. After an accident, the market value of your vehicle may decrease to $95,000, $89,000, $82,000, or even lower, depending on the severity of the damage. If you get it fixed with substandard parts, it will further lower the market value of your car.
However, even if you get it repaired with new parts, the car would not have its previous value of $97,000. Buyers will hesitate and try to purchase your vehicle for the lowest price possible due to its accident history. Suppose a buyer purchases it for $92,000. Then, ($97,000 - $92,000). The car’s diminished value will be $7,000.
The diminished value claim in Alaska is the law, providing you with the right to recover the loss in the market value of your car after it's damaged in an accident. With this right, you can file a claim with the necessary documents and ask the at-fault party’s insurance company to pay for all your losses. Depending on the state, the laws of diminished value claims might vary. An appraiser company like ADR Claims, the best appraiser company in Alaska, can help you with the laws.
We have a basic understanding of what a diminished value claim in Alaska is. Now, moving to the main topic of this blog, things to consider while filing this claim are as follows:
When your car is damaged in an accident, the at-fault party’s insurance company pays for your losses. For instance, if your car was hit by another person's vehicle at a traffic signal, their insurance company will pay for your losses. However, if you were at fault for the accident, you may not be eligible to file the Alaska diminished value claim.
Uninsured motorist coverage or underinsured motorist coverage (UM/UIM) is crucial for diminished value claims, so don’t overlook them. The UM pays your damages in case the at-fault party doesn’t have insurance. Similarly, UIM pays your damages if the at-fault party’s insurance limits are very low.
Generally, both coverages are part of your own auto insurance policy. One thing is that insurers resist paying diminished value under UM/UIM coverage. So, you should obtain a professional appraisal, legal help, and a demand letter with policy provisions.
It is the legal deadline to file a diminished value claim in Alaska or any other state. In this state, you need to file the diminished value claim within 2 years of the accident. If you miss this deadline, you are not eligible to file the claim.
The diminished value of a car is calculated based on factors like the severity of the damage, the mileage of the car before and after its accident, and the vehicle’s market value before its accident. Then, there are formulas to determine the diminished value. You can use the 17C formula with the help of NADA Retail Value and/or Kelley Blue Book to calculate the value.
If you file your diminished value claim in Alaska against the at-fault party’s insurance company, they are legally obligated to pay your loss. Not only that, but the company is also obligated to provide you with a written explanation of the damage valuation. However, if you file a claim against your own insurance company, whether they will pay your losses or not will depend on their policies. If their policies exclude diminished value claims, they won’t pay; otherwise, they might.
If some of the diminished value was not covered by insurance, you may be eligible to deduct it as a property loss using IRS Form 4684 and Schedule A of Form 1040.
A diminished value claim is a long and complex process. So, you must have a deep knowledge of the policies and be able to negotiate with insurers properly, which is much more difficult than it sounds. Then, what to do? ADR Claims is here to help you. At every step of the way, we stay with you and solve all your queries, including how to file a diminished value claim in Alaska. We provide you with full support only so that you receive a fair settlement from the insurance company.
Apart from Alaska diminished value claims, we offer several other services, such as total loss value appraisal, stated value appraisal, lease return inspection, etc. Whatever your problem may be, we have the solution. Contact us at 866-659-5146 or email office@adr-claims.com.
