04 Sep Virginia Statute Recognizes Diminished Value for Wrecked Cars
Contrary to what some insurance companies say, Virginia recognizes diminished value of vehicles. In fact, the Virginia legislature, the General Assembly, specifically defines the term “diminished value compensation” in the Virginia Code. In Chapter 16 (Salvage, Non-Repairable, and Rebuilt Vehicles) of Title 46.2 (Motor Vehicles), (Section 46.2-1600), the following definition appears:
“Diminished value compensation” means the amount of compensation that an insurance company pays to a third party vehicle owner, in addition to the cost of repairs, for the reduced value of a vehicle due to damage.”
In addition, the term “diminished value compensation” is used in the definition of the term “salvage vehicle”. The Virginia Code makes it clear that any amount paid to the owner of a vehicle for diminished value is not included in the cost of repair of a damaged vehicle, when the cost of repair is calculated as part of the process of determining if a vehicle is, in fact, a salvage vehicle. Specifically, Va. Code Section 46.2-1600 states:
“Salvage vehicle” means (i) any late model vehicle which has been (a) acquired by an insurance company as a part of the claims process other than a stolen vehicle or (b) damaged as a result of collision, fire, flood, accident, trespass, or any other occurrence to such an extent that its estimated cost of repair, excluding charges for towing, storage, and temporary replacement/rental vehicle or payment for diminished value compensation, would exceed its actual cash value less its current salvage value; (ii) any recovered stolen vehicle acquired by an insurance company as a part of the claims process, whose estimated cost of repair exceeds 75 percent of its actual cash value; or (iii) any other vehicle which is determined to be a salvage vehicle by its owner or an insurance company by applying for a salvage certificate for the vehicle, provided that such vehicle is not a nonrepairable vehicle.”
This means that diminished value is expressly recognized in Virginia by the General Assembly and that an owner is entitled to recover the diminished value of their vehicle after it has been wrecked. Do not allow insurance companies to “frustrate” you out of, or convince you that you are not entitled to recover your car’s diminished value – contact Paullin Law Firm at 804-464-3765.