Is a Diminished Value Claim Worth It?

is it worth it?

From looking at our internal data of real Tiger DV clients I know that the average diminished value claim is about $5,000. And this is for an average car. For example, a real client’s two-year-old Honda Passport had $5,150 in diminished value. So maybe if you’re Jeff Bezos or Mark Zuckerberg, a diminished value claim is not worth your time but for an average American car owner, a diminished value claim is very much worth their time.

Of course, when people ask this question, they are also asking about the other side of the equation: is a diminished value claim worth their time, effort, and expense? If you know how to properly make your claim, it is certainly worth your time, effort, and the small expense of an independent diminished value appraisal. A Tiger DV Certified Appraisal costs $349. For an average $5,000 claimant, that’s a 14X return on investment. I would say that’s a pretty good value for the customer. And in some cases, claimants are even able to get the appraisal cost reimbursed by the insurance company.

When people run into trouble and frustration is when they don’t know how to properly claim diminished value from insurance. Insurance companies take advantage of this lack of knowledge to frustrate people into either giving up on their claim or accepting much less than what they deserve. Delay is one of the dirty tactics of auto insurance companies. When an unethical adjuster takes two weeks to reply to a single email many people prefer giving up rather than persisting with their claim – and that’s by design.

confused claimant

An average auto adjuster deals with over 100 claims a day. An average car accident victim experiences one accident in 18 years. Who do you think will have the upper hand in any claim? This is why we provide every client with our “Easy Claim Guide” which breaks down exactly what to do with your claim step by step.

If you know exactly what to do, I would estimate that on average taking care of your diminished value claim doesn’t take more than one hour of your time. In the 10% of claims where filing in Small Claims is necessary, it’s about two hours total time commitment. If we look at the hourly rate for the average $5,000 claim, $5,000/hr or even $2,500/hr is not too shabby in my humble opinion. So the real question is – can you afford NOT to claim diminished value? Another excuse I sometimes hear is: “I don’t have time for this!” I think once you realize your hourly rate on this claim – you will make time.

Insurance companies have employed certain tactics to make certain claims seem difficult and time-consuming. These tactics are designed to be a deterrent to future claimants. If car accident victims are discouraged from filing a claim at all or from insisting on getting paid a fair amount, insurance companies “save” (steal?) tens of billions of dollars in claim payouts annually. Every time a consumer decides not to pursue a valid diminished value claim with GEICO, Warren Buffet, the billionaire owner of GEICO gets on average $5,000 richer. Who needs this money more? You or him? Don’t become a diminished value statistic. Don’t be intimidated and pursue what you deserve. With the help of an experienced appraiser, it’s not difficult or time-consuming.

To be fair, claiming diminished value is not always worth it. For example, if you have a 16-year old car with 280,000 miles on it, diminished value is very likely to be zero. But the average car is not that old and doesn’t have that many miles on it. The percentage of cars where claiming diminished value is not worth it is very small. Also, don’t try to guess diminished value. Unless you’re a seasoned auto appraiser, it’s very difficult to have any idea of the diminished value amount without first obtaining a professional diminished value estimate. Even when people ask me to give them a range, I tell them: “I have no idea. Give me the data on the vehicle and the accident and I will give you a solid number.” Auto appraisal is not a guessing game. Accurate input data combined with a USPAP-compliant methodology results in a high-quality, reliable appraisal.

To see how big your diminished value claim is get a free diminished value estimate.

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