Inherent Diminished Value (IDV) Damages Explained

Auto accidents are traumatic. In addition to physical injury, your vehicle may be severely damaged in the collision. Even if your automobile is returned to its original state, its market value may lower. The disparity in the market price of your automobile before and after a collision is referred to as diminished value.

In the past, Massachusetts would not hold auto insurers responsible for paying Inherent Diminished Value damages, or IDV. However, in a recent hearing, the Supreme Judicial Court (SJC) of Massachusetts unanimously decided to allow third parties to file claims for IDV damages.

Here’s what you should know about Inherent Diminished Value and how to get the right legal help after an auto accident.

What Is Inherent Diminished Value (IDV)?

The value of your automobile after an accident will automatically decline simply for having been in a collision, even if you do everything possible to return the vehicle to its pre-accident state. If you attempt to sell your car, public records will reveal that it was involved in a collision, inherently lowering its market price.

This is called Inherent Diminished Value (IDV) and is considered the most widely accepted form of diminished value in the U.S. This kind of diminished value presumes that the car’s restoration was of the highest quality and the vehicle was returned to its best possible condition following the collision.

Other Types of Diminished Value

There are two other types of diminished value claims that can be filed after an auto accident, but these are much less common than IDV claims.

Immediate Diminished Value

This kind of diminished value pertains to the loss of resale value directly following an auto accident, prior to the vehicle being repaired. However, this type of diminished value claim is rarely used since insurance companies are typically quick to repair a damaged vehicle. Immediate diminished value is also generally not used in cases where the vehicle can be declared a total loss. A total loss occurs when the vehicle either cannot be repaired at all or repairing the car would cost more than its diminished value.

Repair-Reduced Value

This kind of diminished value refers to the depreciation of a vehicle’s overall value as a result of poor-quality repairs made after a collision. For example, the resale value of a car can lower substantially if the body of the vehicle is restored with a paint color that isn’t a perfect match, or if a mechanic uses aftermarket components instead of OEM parts. This reduced value implies that the car cannot be returned to its previous condition.

Calculating IDV After a Car Accident

Most auto insurance carriers use a complicated formula to calculate Inherent Diminished Value after a car accident. An auto accident attorney can also help. While it might seem as easy as subtracting the current market value from the original pre-accident value of the vehicle, the formulas used are more complex than this. There are caps and damage multipliers that make damages difficult to determine for someone not already well-versed in this area.

Should You File a Diminished Value Claim?

For some people, filing an IDV claim isn’t necessarily the best option. When you file this type of claim, there’s no guarantee of compensation. For others, it’s another way to optimize restitution. An experienced car accident lawyer can review your case and help you determine if pursuing this type of compensation is likely to end up being beneficial for you.

Some things to think about include but aren’t limited to:

How much your car was worth prior to the collision.If your car is old or already damaged, you may not be eligible to file a diminished value claim.
If you caused or contributed to the accident in any way.If you were the one who caused the collision, or you are partially at fault, your insurance provider is unlikely to pay for your vehicle’s diminished value.
If you were involved in a collision with an uninsured person. An IDV claim can help you recover as much compensation from your own insurance as possible since the at-fault party doesn’t carry any.

It’s usually better to file an IDV claim with the at-fault person’s insurance carrier as soon you can after the collision, preferably within days or even the same day. When you file immediately, it is generally easier to present a compelling case with supporting evidence. It’s also important to note that your vehicle may continue to decrease in value as you wait to file a claim.

There are several steps you must go through to file an IDV claim, and arguably the most difficult part is procuring the evidence needed to meet the burden of proof in diminished value cases.

Contact Premier Massachusetts IDV Lawyers Mazow | McCullough, PC Today

If you were involved in an accident and your vehicle’s value has lowered significantly as a result, you may be eligible to file a diminished value claim.

Veteran personal injury attorney Kevin J. McCullough was at the heart of the Supreme Judicial Court’s decision to allow IDV claims in the state, representing the plaintiff in the now-historic McGilloway, et al. v. Safety Insurance Company case. As a former insurance attorney that handled injury and wrongful death claims on behalf of the insurance company, McCullough has an innate understanding of how the claims process works that most other personal injury lawyers do not.

Working with Attorney McCullough and the team at Mazow | McCullough, PC ensures you have a competitive edge in your case. We will review your case and pursue the maximum available compensation from all possible sources, including an IDV claim.