New York Diminished Value Law

The value of a car diminishes after an accident even if returned to its pre-accident condition. It is more difficult to sell a vehicle after it is in an accident and affects its retail value.

Insurance

New York insurance law defines liability insurance as the protection against loss resulting from damage to the property. An insured motorist can file a claim with an insurance company for benefits from damage caused to a vehicle in an accident.

Valuation

An insurance company must determine the value of the vehicle. The insurance company determines the value by using one of several methods, including ascertaining the retail value, considering the amount the insured paid for the vehicle plus markups for improvements or by determining its worth after subtracting the damage sustained before the accident.

Diminished Value

In New York, diminished value refers to the difference between the value of the car before the accident and the value of the car after the accident. The law requires the insurance company to return the car to same condition it was in prior to the accident. In New York, insurance companies do not have to compensate the insured for the loss of value resulting from the accident.

References

• Auto Accident: Determining Value and Diminished Value
• Bankrate.com: Car Wreck? Diminished Value May Be Your Loss