Sample Demand Letter
Eligibility: Not all claims are eligible for diminished value. It is important for you to understand local laws and entitlements under your policy to determine your eligibility. Please consult a local legal professional.
Process: In states where first party claims are not eligible for diminished value, most people make the mistake of pursuing the insurance company for direct compensation. This may or may not work depending on how cooperative the insurance company is. Typically, you need to pursue the at-fault party first and, under the liability portion of their policy, their insurance company defends them and covers their judgment costs. Some insurers may make it convenient for all parties and avoid court costs by settling directly. However, others may require you to follow through with the legal process. Judgments may include your legal fees and expenses such as the cost of this report and additional physical appraisals depending on local laws. Please consult a legal professional for local rules, procedures and coverages.
Credibility: This calculator generates its values using a proven methodology consistent with professional pricing in the used car market, which is combined with a complex algorithm that factors in all of the data elements provided by the user. This includes prior accident/damage history, market value of the vehicle, the competitiveness of your local market and nature and cost of damage repair. The developers of the software that powers this site have over 30 years experience in auto appraisal management at major insurance companies and over 10 years experience in professional car buying through our sister company, Automall Network, which is a licensed dealer that purchases vehicles throughout North America.
Size of Report: There are many services that charge hundreds of dollars or more to generate an elaborate multi-page diminished value report. Often times, the content may be a verbose repeat of the information provided by you and already known to the insurance company. Insurance companies and courts are not swayed by the number of pages or a lengthy explanation. They are interested only in the facts i) were the vehicle specifications, damage amounts and type of damage correct in determining the extent of the diminished value, ii) was the proper market value (otherwise known as ACV or actual cash value) used as the foundation upon which to calculate the diminished value, and iii) is the number reasonable, reliable and from a credible source? It is virtually impossible to find a similar vehicle with the same amount and type of damage that has recently sold to use as a comparison. As such, any diminished value generated is strictly a professional opinion of a fair and reasonable number, typically generated by an algorithm and/or methodology, and should be from a credible impartial expert in vehicle market pricing. Insurance companies themselves use their own formula when attempting to calculate the diminished value for their purposes. In many cases, they will tell you to do some research, perhaps even talk to some dealers, to get an independent value of your own. Once both sides have a number in mind, the final outcome may involve some negotiation, no different than if you were selling the vehicle to a prospective buyer.
Responsibility: If you are claiming for diminished value, the onus will be on you to establish the amount of your loss. We recommend taking the lowest cost approach first and gradually increasing the time and money you invest, if you wish to pursue this. If the insurance company will settle quickly with only this report, then you're done.
Next Steps: The insurance company may come up with a value using their own formula. It may be worthwhile to negotiate a settlement somewhere in between, just like negotiating the sale price of a vehicle. Alternatively, you may need to talk to a few dealers and get trade-in values with and without disclosure of the repair. This will help support the amount of your loss. And finally, if you still can't get satisfaction, then you may need to take legal action, starting with a simple demand letter to the other party. Again, talk to a local legal professional to get the proper advice. If the matter goes this far, then you may need to hire an independent appraiser for a physical inspection (see our Resource Directory below). If the amount of diminished value is below small claims court thresholds, you may be able to do most of the steps required yourself at little or no cost.
Resource Directory: We are compiling a directory of local resources that may be of assistance if you run into problems settling quickly. Please note that this list is solely for your convenience. We do not charge anything to be listed in our directory or any referral fees if you use their services. The use of any person(s) on the list is at your sole discretion and responsiblity. We do not warrant any of the services they provide or make claims about their competency. We do however want to hear of any complaints which we will investigate and it may result in the removal of providers from the list.
Good luck and please let us know if we can be of any further assistance and how it turns out. Also, feel free to have the insurance company call us directly if they have any questions about our report.