What to Know About Diminished Value Claims in Missouri

A serious car accident comes with many long-term impacts on the victim’s physical and financial well-being. The diminished value of a damaged vehicle may be one of them. After a car accident, a car that isn’t totaled typically undergoes repairs paid for through a property damage claim against the driver who caused the accident. Once repaired, a vehicle may look as good as new, but is it?

Sadly—no. Even the best repair job cannot restore a car’s full value or reestablish the value it had before the accident. A car’s “diminished value” is the difference in a car’s value after an accident compared to before the accident.

But does a driver just have to suffer this loss? Not in Missouri. Missouri law allows drivers to recover this financial loss through a diminished value claim.

Why Does an Accident Reduce the Value of a Vehicle?

Once a vehicle has been damaged in an accident, it loses its previous market value because most consumers do not wish to purchase a vehicle that’s been previously damaged and repaired. Not only are these vehicles arguably less safe, because it’s more likely to have future problems and vulnerable areas in an accident, but for those who consider a vehicle an investment, the resale value of a previously damaged vehicle is far lower than the same make and model vehicle that hasn’t been in an accident.

What is a Diminished Value Claim in Missouri?

Missouri is one of 49 diminished-value recovery states or states that allow accident victims to make claims against an at-fault driver’s insurance to compensate them for the difference in the market value of their vehicle after an accident compared to its value before the accident. According to Missouri auto insurance laws:

“If you make a claim under someone else’s policy (e.g. your auto is damaged because someone else hit you), Missouri courts have included diminished value as recoverable damages.”

Claimants can determine the value of their vehicle immediately before the accident by checking the Kelley Blue Book value, asking dealers in the area, or by locating a vehicle listed for sale that is the same make, model, year, and similar mileage.

If an insurance company disputes the amount of compensation an accident victim seeks in a diminished value claim, as the plaintiff in the case, it’s up to you to prove the vehicle’s market value is more than the amount offered by the insurance company for the difference in its value.

What is “Betterment” in a Missouri Diminished Value Claim?

In some claims, the insurance company may dispute the amount of compensation sought by citing “betterment.” Betterment in a diminished value claim occurs when an insurance company offers a lower settlement for a car’s diminished value because the replacement parts on a repaired vehicle are in better condition than the original part or parts at the time of the accident. For example, if the car’s tires were several years old and worn, and the brake pads were due for replacement before the accident, but the repairs gave the vehicle new tires and brakes, the insurance company may reduce the compensation for diminished value by the amount of the new parts.

Because this type of claim becomes challenging as the accident victim and insurer dispute diminished value claims and betterment improvements, it’s always beneficial for a claimant to hire an experienced car accident attorney in St. Louis.