Diminished Value Claim: North Carolina
If your vehicle was damaged in an accident in North Carolina and underwent repairs, its resale value is likely to be less than what it was before the crash. This loss in market value is known as diminished value, and it is recoverable in North Carolina through a diminished value claim filed with the at-fault party’s insurance company.
Summary – North Carolina Diminished Value Claims
Statute of Limitations: 3 years
Third-Party Diminished Value Claim: Yes
First-Party Diminished Value Claim: No, most insurance policies will exclude diminished value.
North Carolina Property Damage Minimum Limits: $25,000 in coverage
Uninsured Motorist Coverage for Diminished Value: Yes, $25,000 of UMPD coverage is required. The uninsured driver must be identified.
Underinsured Motorist Coverage for Diminished Value: Yes, it’s an optional coverage
North Carolina Small Claims Court Limit: $10,000, attorney representation and appeals are permitted
How to File a Diminished Value Claim in North Carolina
Fortunately, diminished value claims in North Carolina are widely accepted by courts and insurance companies. However, insurance companies won’t tell you about your right to be made whole for your vehicle’s lost value voluntarily. You’ll have to demand compensation for it.
You must supply evidence that your vehicle has lost value. An independent, unbiased appraisal will provide the documentation necessary to determine the diminished value of a vehicle. If the other driver was uninsured, you can file a diminished value claim in North Carolina with your own insurance company.
Once you submit a diminished value appraisal report from a competent appraiser, most insurance companies will make a settlement offer.
Occasionally, some insurance companies may deny your claim or offer you a very low amount based on a flawed formula. When you’re unable to reach a fair settlement regarding diminished value in North Carolina, the next step would be to invoke the appraisal clause, rather than filing a lawsuit against the at-fault driver in small claims court. North Carolina has an alternative to filing a lawsuit; it’s called the North Carolina third-party appraisal clause (North Carolina General Statute 20-279.21).
How the North Carolina Third-Party Appraisal Clause Works
When you and the insurance company fail to agree on the amount of diminished value in North Carolina (the difference in market value before and after your accident) and that difference is greater than $2,000 or 25% of your vehicle’s fair market value. Either party can invoke the appraisal clause.
The appraisal clause plays out like this:
1. Either party makes a written demand invoking the appraisal clause.
2. Each selects a competent and disinterested appraiser who holds an NC Motor Vehicle Damage Appraiser license. You hire your own appraiser. The insurance company hires its own third-party appraiser.
3. The two appraisers appraise diminished value in North Carolina and attempt to reach an agreement on what the settlement amount should be. If they agree on a number; the appraisal clause is over, and the insurance company will send you a check for the agreed-upon amount.
4. If the appraisers fail to agree, an umpire is then selected. The umpire and the appraisers must be licensed as Motor Vehicle Damage Appraisers by the state of North Carolina. An umpire reviews both appraisals, preparing a report to decide on the final diminished value amount. The umpire’s decision can’t be any higher or lower than what the two appraisers stated in their appraisals. It must fall somewhere in between.
5. The appraisal clause is nonbinding, meaning you or the insurance company can reject the outcome within 15 days.
As you can see, the appraisal clause is a consumer-friendly statute that offers an attractive alternative to filing a lawsuit for a diminished value claim in North Carolina. The combination of the title disclosure, 25% NC damage disclosure, and third-party appraisal clause makes North Carolina a popular state for diminished value claims.
If you have any questions, please call us at (850) 201-1950 or complete a free estimate form to get further assistance with your North Carolina diminished value claim.
North Carolina Damage Disclosure
Did you know insurance companies routinely pay diminished value claims in North Carolina? An argument could be made that North Carolina is one of the best states for recovering diminished value claim settlements!
Favorable laws and the NC third-party appraisal clause make it a great state for getting your claim paid.
Additionally, North Carolina’s damage disclosure laws are some of the strictest in the nation. These laws apply to both individual sellers and car dealerships, which contributes to diminished value claims in North Carolina.
It starts with the vehicle title itself. On the backside of a North Carolina motor vehicle title is a section that asks if your vehicle has ever been involved in a collision or other incident where the repair costs exceed 25% of fair market value. If the answer is yes, you must check that box alerting any potential buyer of your car’s accident history. Ouch. Checking that box presents a serious challenge when you try to sell your car.
In addition to the title disclosure, there’s a law concerning diminished value claims in North Carolina specifically pertaining to cars less than five years old. Dealers and private party sellers of vehicles less than five years old are required by law to disclose any damage that’s over 25% of fair market value to the buyer IN WRITING. There’s no sweeping the accident under the rug, since North Carolina damage disclosure laws make sellers legally required to inform potential buyers about previous accidents.
For example, if your car has a market value of $20,000, it only needs to suffer $5,000 in damage to be subject to the disclosure law. Disclosing your vehicle’s damage history will hurt its value since most buyers would choose a vehicle without an accident history. The accident history will scare off many potential buyers and those who remain interested will demand a steep discount to assume the risk of purchasing a previously damaged vehicle.
This loss of value due to the accident history is known as diminished value. A diminished value claim in North Carolina may help you recoup the drop in resale value and/or lack of buyer interest.
North Carolina Diminished Value Law
N.C.P.I – Civil 106.62 Property Damage (NC jury instructions)
The plaintiff’s actual property damages are equal to the difference between the fair market value of the property immediately before it was damaged and its fair market value immediately after it was damaged. The fair market value of any property is the amount that would be agreed upon as a fair price by an owner who wishes to sell, but is not compelled to do so, and a buyer who wishes to buy, but is not compelled to do so.
Evidence of [estimates of the cost to repair] (and) [the actual cost of repairing] the damage to the plaintiff’s property may be considered by you in determining the difference in fair market value immediately before and immediately after the damage occurred.
DeLaney v. Henderson-Gilmer Co., 135 S.E. 791 (N.C. 1926). Evidence of the reasonable value of repairs to a damaged vehicle, and the reasonable market value of the vehicle as repaired, are admissible to show the difference in its value before and after it was injured
The law in North Carolina is on your side and allows you to recover diminished value when you aren’t at fault.
