If you’ve been involved in a car accident and have been talking to insurance companies, you may have heard the term “diminished value.” But what does this actually mean? When an insurance company or lawyer talks about the diminished value of your vehicle, they are talking about the difference between what your car was worth prior to the accident and what it’s worth after the accident. This can be an important consideration when pursuing legal action or deciding whether to take a settlement offer from the insurance company.
If you’re not sure how diminished value may factor into your car accident case, our attorneys can help. We can talk with you about the particulars of your accident and help you calculate diminished value.
How Is Diminished Value Determined?
Diminished value is determined by a formula that takes a percentage of the car’s pre-accident value – usually capped at 10% – and then multiplies that by a decimal between 0 and 1 for both damage to the vehicle and the mileage on the vehicle. The result is the diminished value of the car. We’ve included an example below to make this a bit more clear.
Let’s say a car is worth $30,000 before the accident, and we’re using 10% as the full base value of loss. That gives us an initial diminished value of $3,000. But the insurance company decided that there was only moderate damage, so they use the 0.5 multiplier for that factor, and the car had only 15,000 miles on it, so they use the one multiplier for the mileage factor. The calculations for final diminished value, therefore, would be $3,000 x 0.5 x 1, which is $1,500.
Is South Carolina a Diminished Value State?
Yes, South Carolina is a diminished value state. This means that the South Carolina state laws provide grounds for the victim of a car accident to file suit for compensation to recover the diminished value of their vehicle as a result of the accident. You will need to be able to present the courts with the diminished value of the vehicle and any other damages you are suing for.
What Is the Statute of Limitations for Diminished Value in South Carolina?
In the state of South Carolina, the statute of limitations to pursue a car accident case is three years. Because the issue of diminished value is attached to an auto accident lawsuit, the statute of limitations for it is also three years. This means that you have to file a lawsuit against the negligent party within three years from the date of the accident if you wish to pursue compensation for injuries, pain and suffering, and the diminished value of your vehicle through the courts.
Going through the aftermath of an auto accident can be difficult, but we’re here to help. Call (803) 888-2200 to learn more about our personal injury services and your options for pursuing a case.