Inherent Diminished Value (IDV) FAQ - Mazow | McCullough, PC
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Inherent Diminished Value (IDV) FAQ

Lyft Driver Wants to Handle an Accident PrivatelyGet your questions answered about Inherent Diminished Value, also known as IDV. Discover when it may or may not be in your best interests to file this type of car accident claim and find out how to get help from an experienced New Hampshire or Massachusetts car accident attorney after a collision damages your vehicle.

What Is Inherent Diminished Value (IDV)?

Following an accident, the market value of a motor vehicle will automatically decline, even if all the necessary repairs are made and the vehicle is restored to its near-original condition. This gap between the how much your car is worth before and after a collision is known as inherent diminished value. Public records will indicate that the vehicle has been in a wreck, so it’s usually not feasible to try to obscure the history of the car when trying to sell it.

Are There Other Types of Diminished Value?

There are two other common types of diminished value that can occur after an accident. The gap in sales price following a collision but before a car is restored is known as immediate diminished value. Since most material repairs are done by your insurance provider right after a crash, this form of lost value is infrequently used.

Following a collision, repair-related diminished value means the vehicle has been reduced in value as a result of poor-quality repairs. This results in a further loss of value on top of the vehicle’s reduced market value as a result of the crash. This type of diminished value implies that the car cannot be returned to its previous state, even with additional repairs.

How Is Diminished Value Calculated?

The majority of insurance carriers utilize the 17c Diminished Value Formula to assess the new market value of a car or truck after a collision. This involves several steps, including:

  • Calculating the current market value of your undamaged vehicle using its make, model, year, and other important information
  • Applying a cap to that total value, usually 10%
  • Applying a damage multiplier between 0.00 (no damage) and 1.00 (severe damage)
  • Applying a mileage multiplier between 0.00 (100,000+ miles) and 1.00 (0 to 19,999 miles)

When your insurance company makes an offer, ask them to note how they came to that settlement figure. Double check their math and ask questions about any discrepancies you come across in the process.

How Can I Collect IDV Damages?

To collect inherent diminished value (IDV) or any other type of diminished value following an accident, you must file a claim with the at-fault party’s insurance company. You must be able to provide evidence of the diminished value of your vehicle and information about how you calculated this number when you submit your claim. You stand the best chance of success when you work with an experienced car accident attorney to help you submit an accurate, well-supported, and timely IDV claim.

When Should I File a Diminished Value Claim?

Filing an IDV claim may not necessarily be the best option for you depending on the circumstances of your accident. For example, you may not want to file a claim if you were at fault for the accident. Even if you have full coverage, your insurance company may deny your claim if the other party can prove that you were fully or partially at fault for the collision.

You may also want to avoid filing an IDV claim if your vehicle had little to no inherent worth prior to the accident. In this case, it may be better to consider your vehicle totaled. If the other driver doesn’t have motor vehicle insurance and they were at fault for the accident, you will need to file the claim with your own insurance provider.

Do Insurance Companies Have to Pay an IDV Claim?

Whether or not an insurance company is required to pay a claim for inherent diminished value depends on that state’s individual laws.

New Hampshire has what is called Evolving Diminished Value Recovery. This means that if the other driver’s carelessness caused damage to your vehicle, their insurer is responsible for the reduction in the value of your car or truck. In NH, however, there is no established case law for the recovery of IDV damages.

In Massachusetts, insurance providers were not responsible for the inherent diminished value of a covered vehicle until recently. Attorney Kevin J. McCullough recently won an appellate case in the Massachusetts Supreme Judicial Court that establishes insurers must pay IDV claims.

Do I Need a Car Accident Attorney to Help Me?

It’s possible to file a claim for inherent diminished value without the assistance of a car accident lawyer, but this may not necessarily be in your best interests. More often than not, the first time a consumer files their own IDV claim, they will likely be denied. However, you can increase your chances of success by working with an experienced attorney to file your claim. Insurers are less likely to act in bad faith if they know an auto accident lawyer is on board.

Call Mazow | McCullough Today for More Information

Don’t wait to reach out for legal help after being involved in an auto accident. At Mazow | McCullough, PC, we have the skills and experience to represent you in settlement negotiations and litigation if necessary, following a collision. We’ll advocate for you to receive the maximum amount of compensation available in your case.

Call now for a consultation to discuss case specifics or to schedule an appointment to speak with one of our attorneys in person. Dial (978) 744-8000 or toll free at (855) 693-9084. Our caring team of lawyers, paralegals, and office staff are available now to assist you.

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