I was talking with a few people today about my car situation (getting repaired after being rearended) and they asked me whether or not I had taken advantage of my depreciation clause. Or something along those lines.

In a nutshell, they told me that because my car was hit by someone else without insurance and I had full coverage that I could be compensated for the depreciation that my car will suffer due to having been in an accident. Is this a crock? If not, then how do I need to pursue it, what do I need to ask SPECIFICALLY, and how do they calculate how much to pay out? If everything goes according to schedule, then my Z should be fixed by end of next week. I definately want to investigate this since it may prove to be to my benefit. Anybody got any info for me?

 

Benj, most things bought and sold depreciate, including cars. I'm at a loss as to what he is telling you.

Possibilities include Uninsured Motorists Coverage which covers you if the person hitting you is uninsured (or underinsured). However, this is generally for injury to you or your passengers. There are a limited number of states which also include Physical Damage. Check your own policy for the coverage, usually added as an endorsement.

Or, he could have been talking about your deductible. It may be that your policy will cover your vehicle without applying the deductible if you were hit by an uninsured vehicle. Actually, this works in conjunction with the Uninsured Motorists Coverage.

Assuming you purchased your insurance through an insurance agent (not from the company direct), he/she is your best source of information. In fact, they should represent you in the claim procedure.

BTW, if your insurance adjustor hasn't brought to your attention the fact that you will be responsible for part of the bill, you likely aren't. You're better off talking to them, or your agent, long before you come to a bunch of turkeys like us.

 

Thanks Ronny. I was trying to wrap my head around how this could possibly work. How can my insurance company foot the bill for the repairs AND give me a check to cover the amount of depreciation my car will sustain?? Made no sense, but I heard this from two independent sources without bringing up the topic. Why do you think they would both recommend that I check into this?

 

I'm at a loss. I was a commercial property, auto and liability underwriter, so my knowledge of personal auto is just what rubbed off on me, and from my own coverage.

In very general terms, Replacement Cost is equivalent to what it would take to replace your car if it is totalled. This is what might take place if your car is fairly new, or if you purchased a specific coverage which guaranteed this amount. Some companies have this option and some don't. My company, Country Mutual, calls theirs The Keeper. It will pay the cost to replace except in the event of fire or theft (the old moral hazard stuff).

Shortly after you drive your car off the dealer's lot (actually immediately after you sign your name and pay your money), your car is subject to depreciation. Some cars can depreciate thousands of dollars at that point, and in the first year, resulting in what can be termed Actual Cash Value.

Replacement Cost less Depreciation equals Actual Cash Value. These are Property and Casualty terms, but they apply here as well.

Your friends, I believe, are confused. They seem to be saying that your insurance company will repair your car and them pay you the difference between it's Actual Cash Value and Replacement Cost. Why would they do that? They are normally only required to "make you whole". A fully repaired car will do that. They don't owe you any more, unless there is some special contractual obligation you aren't currently aware of.

Again, only your hairdresser knows. No, wait a minute, I meant insurance agent.

 

Yeah I couldn't figure out the reasoning behind that. After my car is repaired as new then their obligation to me over. I guess the people who advised me to check into this didn't have their facts straight.

Still, I hate the fact that my practically new Z is worth less now that it has been involved in an accident. Not that I plan on ever getting rid of it.

 

I still recommend you discuss this with your agent. Your company, or your state, may have some feature I'm not aware of.

Actually, I'd try to pin those two guys down and try to determine just what they meant.

Your Z is not necessarily worth less, especially if you plan on keeping it for a number of years. I would, however, keep a really close eye on those front tires, especially if you had front end damage; the old feathering thing, you know. It could be exacerbated by the collision.

Anyway, good luck.

 

Ok. Here's the scoop.

Today I called my insurance company and asked about this depreciation compensation. My agent researches my policy and tells me to call a different dept. within the company to see if I qualify for Diminished Value. After talking with a rep. for about 10 minutes, she discovers that since I was covered by my unisured motorist policy, that I definately qualify for Diminished Value. The amount is determined by a different dept. and I should be contacted within the next week with a quote. She wasn't 100% sure as to how they calculate the payout amount but she seemed pretty confident that it would be in the neighborhood of between 7-10% of the cars value before the accident. Apparently, only around 4 states participate in this policy and lucky for me, Tennessee is one of them. Now I just have to wait for the rep to call me with an amount! I'm stoked!

 

Cool! It stands to reason based on my past experience in the business. You can never say never because every state has it's own little idiosyncrasies. I wish we had that coverage in Okla. Kudos to your two buddies.

If you think about it, post the results.

 

Thanks, Ronny. I'll keep you up to date. Definately a nice suprise. I guess my good Karma was in effect this time around. This will certainly ease the pain of having to spend the last month without my beloved Z. With any luck, I will be ordering some new leather seat covers with the proceeds

 

Well Ronny basically summed up what I was going to say. Once you mentioned diminished value I knew that was a state clause, that is not shared here. Man I wish we had that coverage in are state law.

Sorry I'm so late getting to thread but I couldn't log on to the site for the last few days. Did anyone else have this problem?

 

Man I know! Did I get lucky or what. I'm glad some of the people I work with were aware that that clause existed, otherwise I would not have had the slightest idea as to how to approach it. Depending on how much I get back, the mods are gonna flow