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Small Claims Court: Diminished Value Claim

Discussion in 'Auto Accidents, Injuries' started by main0stage, Apr 24, 2019.

  1. main0stage

    main0stage Law Topic Starter New Member

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    Jurisdiction:
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    I was t-boned by a careless driver, who then ran/drove away from accident site. She was flagged down few hundred yards away by witnesses and cops that happened to be driving past. All this is detailed in police report.

    Her insurance company immediately accepted full liability. Total repair cost was 25k (100k worth car) but the girl had only 10k insurance. My insurance company (GEICO) stepped forward to cover the remainder of the cost.

    Although my car is fully repaired, the dealership has stated they will never help me resell my car since it has 'major accident history'. They have given me a copy of policy form Germany HQ. with help of independent Auto Appraiser, I was able to get a report that shows my car has lost about 11k in it's value ...termed as "Diminished Value".

    At-fault driver's insurance company has sent me RELEASE LEtter that offers $4200 for 'loss-of-use' calculated at rate of $60 for 70 days. Remaining amount (10k - 4.2k = 5.8k) is being used for car repair. I have asked them to pay for diminished value, but I was told it is not covered in their policy. I understand there is limits issue and no matter what, they will not pay over 10k. So I advised the other insurance company, instead of paying entire 11k for diminished value, just pay the remaining balance (of 5.8k) as diminished value. Now this will bump up repair costs for GEICO, which my insurance agent has confirmed, they are willing to take this additional hit. GEICO itself will not cover 'diminished value' because it is not in the policy, but according to my agent, at-fault driver's Insurance company should accept it.

    I have served the demand letter to other Insurance company (which i hand delivered instead of certified mail). They have not responded in given 1 month. I am now planning to pursue in Small Claims court, which i think, I can only pursue $7500.

    My questions...
    i) Do i have a legit case to pursue in Small Claims court?
    ii) Is there a criteria how insurance company should compensate for loss-of-use? My car in question, costs much more than $60 a day from rental car companies.
    iii) Main Question: I will file a claim against driver and car owner. I don't believe the driver has the ability to pay a dime, and i do not want to go after someone and make their lives more miserable... but... is my assumption correct that if i sue the driver, it will be instead her insurance company that will deal with claim monies?
    iv) Finally, can other insurance company rescind RELEASE LETTER ($4200 offer) if I pursue for $7500 claim for Diminished Value?

    thank you
     
  2. adjusterjack

    adjusterjack Super Moderator

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    Your agent? You mean the guy that sold you your policy? Confirmed with who? Did he get something in writing from GEICO's claims department waiving it's right of subrogation and expressly allowing you to negotiate with the other insurance company and drive up GEICO's repair cost?

    Here's how it works.

    GEICO pays $25,000 to fix your car. GEICO has dibs on the $10,000 limit on the other driver's policy. Somewhere in GEICO, beyond your agent, and possibly beyond your adjuster, someone is working on getting that $10,000 and none of it is supposed to go back to you, except maybe your deductible.

    You need to be talking to the claim rep at the GEICO claims department, not the agent who sold you your policy. He has no business getting in the middle of this.

    It's possible that the reason you haven't gotten a response from the other driver's insurance company is that the other driver's insurance company has already paid the $10,000 to GEICO. Call the GEICO claim rep and find out. If that's what happened I don't see GEICO giving you any of that money, except your deductible.

    Sure. Diminished value is compensable. But since the other driver only had $10,000 in property damage liability limit, it's doubtful that the other driver or the owner will have the money to pay you the excess.

    Basically, you get a box on wheels as a temporary substitute vehicle. If you want a car comparable to your $100,000 car you pay the difference.

    What claim monies? If the $10,000 limit has already been paid out there are no more claim monies. In fact, the other driver's insurance company will have nothing to do with your lawsuit.

    Read the Liability insuring agreement in your own policy. It's the same as the other driver's policy.

    And since GEICO has a right of subrogation against the other driver, whatever you win in a judgment belongs to GEICO unless you get it in writing from the GEICO claims department waiving its right of subrogation.

    Not only can they rescind it but I'm guessing it's already a dead issue.
     
  3. Tax Counsel

    Tax Counsel Well-Known Member

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    Or gal. ;)
     
  4. main0stage

    main0stage Law Topic Starter New Member

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    pardon my quickly written post... with "Agent" I meant the person at GEICO that is handling my case. They have several stage process and people change at each stage... but now, my case is with a person that is responsible for final settlements. He has assured me more than couple of times and he has also called other insurance company stating that, GEICO is willing to take additional hit of 5.8k towards damage repairs.

    ((I understand that in California, 3rd party claims are entitled for Diminished value... but not 1st party. Which means, GEICO is not liable to pay diminished value but at-fault driver's insurance company is.))

    My question is: Since other insurance company is paying 5.8k for damages... why can they just term that amount as as 'diminished value'... they will still pay total of only 10k. And then, GEICO will pay additional 5.8k damage which they have agreed to.
     
  5. Zigner

    Zigner Well-Known Member

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    If you don't have a policy that covers diminished value, then you're not getting diminished value. It really is that simple.
     
  6. main0stage

    main0stage Law Topic Starter New Member

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    United States[from wiki]
    Some states' statutes acknowledge diminished value and provide the ability for consumers to collect first party claims of DV from their own insurance companies under their own policies. Most states allow the consumer to collect third party claims from the at-fault driver's insurance company. Some states recognize liability for third party claims but not first party claims.
     
  7. army judge

    army judge Super Moderator

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    Internet discussion forums can't PROPERLY address complicated legal matters.

    Although you have received some very valuable information from ALL of the responders to your top post.

    I suggest you invest some of your time to discuss this situation with a couple licensed attorneys in CA.

    The initial consult is normally offered at no charge to you.

    You'll have 20-30 minutes to discuss your concerns and receive answers.

    Good luck.
     
  8. adjusterjack

    adjusterjack Super Moderator

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    I have no idea. I told you how it's supposed to work. GEICO is obliged to pay for the repairs to your car. If the repair cost is $25,000, that's all that GEICO is obligated to pay. GEICO, in turn, is entitled to that $10,000 limit of the at fault driver's policy. Once the other driver's insurance pays it out, their claims people could care less how it's allocated.

    If GEICO is willing to give you an additional $5.8K (and I'm not convinced that it's going to happen) why do you care what it's called.

    Tell me something.

    Did GEICO collect the $10,000 from the other insurance company?

    Is GEICO going to write you a check for $5800 in addition to paying for the repairs to your car?

    Don't tell me what you "think" is going to happen. Ask the GEICO claim person those two questions and come back with the answers.
     
  9. main0stage

    main0stage Law Topic Starter New Member

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    adjusterjack: Thank you for comments. As above poster indicated, I think i have too much information to put in short forum concisely and for readers to consume it all... i will touch base with an attorney. Just as FYI, GEICO has been very good to me.... but do not forget, i have been paying hefty insurance premiums! right?

    It would be very helpful if there is a link or document on state Insurance Commissioner's website that i can search for 'diminished value' rules insurance companies must follow. That is all i need at this point.
     
  10. adjusterjack

    adjusterjack Super Moderator

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    Right. But that doesn't change the provisions of your policy.

    Here you go:

    http://www.mwl-law.com/wp-content/uploads/2013/03/diminution-of-value-in-all-50-states.pdf

    See Page 5 for California. First party is you and GEICO. Third party is you and the at-fault driver.

    Yes, the at-fault driver owes you for the diminished value of your car, GEICO does not. Getting the other driver to pay it above his insurance limit is another story.

    When the dust settles come back and report how this worked out for you.
     
    army judge likes this.
  11. main0stage

    main0stage Law Topic Starter New Member

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    Thank you for the link. I will begin with Small Claims court and report the result here. My case to smalls claims is as below.... (I won't repeat whole story again in this post, but simplified my point with hypothetical numbers... )

    At-fault driver has a limit of 10k, and her insurance company is paying that 10k amount towards damages... why cant that insurance company label that 10k as "diminished value" instead of "damages"? As a result, GEICO will take additional hit of 10k for damages repair and GEICO has confirmed to me as well as to other insurance company this is acceptable to the.
     
  12. Zigner

    Zigner Well-Known Member

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    If you win, you'll likely have to reimburse your insurance company for anything the other party pays towards that lawsuit. In other words, you're going to be doing the insurance company's legwork.
     
  13. Tax Counsel

    Tax Counsel Well-Known Member

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    What difference do you think that would make? Her insurance is paying only $10K no matter what it is called. And what the other company calls it makes no difference to how GEICO will treat it.
     
  14. adjusterjack

    adjusterjack Super Moderator

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    How about - it doesn't want to and it doesn't have to.

    I'll believe that when it happens.

    When is GEICO going to give you the $10,000?
     

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