Diminished Value in Kentucky
This is a guide to vehicle diminished value claims in the State of Kentucky. This guide will define what diminished value is, when it is applicable to a Kentucky resident, when it is best to seek advice from an attorney, and when claims are financially best pursued without an attorney.
What is vehicle Diminished Value?A diminishment in value to your vehicle occurs when another person or driver damages your car. Diminished value is the difference in the value of your car due to it having been in an accident, regardless of being fixed. The diminished value exists because regardless of being repaired, your car will still have a negative vehicle history report showing an accident. This negative vehicle history report is known as Inherent Diminished Value and used-car buyers in Kentucky prefer to purchase cars that were never previously damaged. You have a right to collect that loss in value.
Third party claims onlyDiminished value is a valid cause of action in Kentucky when an at-fault party damages your vehicle. See Eckler-Moore Exp. v. Hood, Ky., 256 S.W. 2d 33 (1953). However, if you were deemed to have caused the damage to your vehicle this will be classified as a first party claim and in MOST cases is not actionable in Kentucky per Tomes v. nationwide Ins. Co., 825 S.W. 2d 284 (Ky. App. 1991) and General Accident Fire & Life Assurance Corp. v. Judd, 400 S.W. 2d 685 (Ky. 1966).
When to use an attorneyAny time you are dealing with a legal claim, it is always best to seek legal advice from an attorney. That being said, your diminished value claim may not be worth the cost of using an attorney. An attorney is best situated to make that decision for you. Any time you have a vehicle with a high market value or one with less than or around 100,000 miles, it is recommended that you seek legal advice in pursuing your claim. The more value your vehicle has prior to being hit, the more value that will be lost due to it being in an accident. As such, there is more at stake when dealing with an insurance company and having legal counsel can help you get the fairest result from your claim.
When to pursue the claim without an attorneyAs mentioned before, anytime you are navigating a legal claim, it is always best to seek legal advice. That being said, when your vehicle is older, has higher mileage, and has a lower market value prior to the accident, the amount of diminished value will be less. As such, this may make the case too expensive for an attorney to be involved. In those situations, it is important that you obtain a report concerning the value of your vehicle prior to an accident, and post accident. Combine this information with a demand letter and proffer it to the at-fault's insurance company. They may not take you seriously, as insurance companies hate to make diminished value payments. Be aware that if the insurance company refuses to work with you, small claims court is a viable option.