Diminished Value Claims: New Jersey
If your vehicle was damaged in an accident in New Jersey and underwent repairs, its resale value is likely to be less than what it was before the crash. It happens. This loss in market value is known as diminished value, and it is recoverable through a diminished value claim in New Jersey filed with the at-fault party’s insurance company. If the other driver was uninsured, you can also file a diminished value claim with your own insurance company if you have UMPD on your policy.
Summary - New Jersey Diminished Value Claims
Statute of Limitations: 6 years
Third-Party Diminished Value Claim: Yes
First-Party Diminished Value Claim: No, most insurance policies will exclude diminished value
New Jersey Property Damage Minimum Limits: $5,000 in coverage
Underinsured Diminished Value Motorist Coverage: Yes, it’s optional and provides a minimum of $5,000 in coverage. No coverage for hit-and-run drivers.
Underinsured Diminished Value Motorist Coverage: Yes, it is optional coverage. No coverage for hit-and-run drivers.
New Jersey Small Claims Court Limit: $5,000. Attorney representation and appeals are permitted.
Understanding New Jersey Diminished Value Law
Under New Jersey law, "the general primary rule is that, in the absence of the total destruction of an automobile, the measure of damages is the difference in its value immediately before and after the injury." Jones v. Lahn, 1 N.J. 358, 362, 63 A.2d 804 (1949) (citing Hintz v. Roberts, 98 N.J.L. 768, 121 A. 711 (E. & A.1923)).
This state’s courts have further clarified this aspect of New Jersey's diminished value law by explaining that if the value of an automobile before it was damaged was greater than it was after repair, the owner is entitled to a sum for the depreciated value of the automobile, in addition to the cost of repair. Fanfarillo v. East End Motor Company, 172 N.J.Super. 309, 411 A.2d 1167 (Sup. Ct. NJ, Appellate Division) [emphasis added].
Stated another way, when repairs still leave the vehicle in a less valuable condition than immediately before the accident, a plaintiff is entitled to prove his full damages by proving the cost of repair and the depreciated value after repair or by showing the value of the vehicle immediately before and after the accident. Premier XXI Claims Mgmt v. Rigstad, 381 N.J. Super. 281, 885 A.2d 521 (Sup Ct Appellate Div 2005).
Another landmark case regarding New Jersey diminished value law was Financial Services Vehicle Trust v. Panter, 2019 N.J. Super. LEXIS 28 (App. Div. Feb. 28, 2019). In this ruling, the Appellate Division decided that a motor vehicle owner may recover for the diminution of the value of the owner's motor vehicle that was involved in the accident as long as the proper proofs are presented.
How to File a Diminished Value Claim in New Jersey
Step 1: Gather Proof.
Proper documentation is essential and plays a critical role in filing any insurance claim. Ensure your claim-related documents and supporting documentation are prepared professionally.
Insurance companies are looking for a high-quality, independent diminished value appraisal performed by an industry expert with the highest qualifications and experience.
Step 2: Submit a Diminished Value Appraisal and Demand Letter for Review.
Typically, you'll bring your diminished value claim against the at-fault driver's insurance company.
Step 3: Settle Your Claim.
Insurance companies will often want to negotiate. Because of that, it’s best to enlist a professional appraiser for assistance with your New Jersey diminished value claim. Negotiate until they get firm with their offer.
DVCHECK can help you with your diminished value claim. If you have any questions, please call us at (850) 201-1950. Submit a request for a free estimate online below.
