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Diminished Value | A Hidden, Recoverable Insurance Claim

DiminishedValue
Prerequisites to Qualify for Diminished Value
1. You must not be at fault in the accident and seek diminished value under the responsible parties’ insurance carrier.

2. You can seek diminished value under your own policy in certain instances, such as with “Uninsured” or “Underinsured Motorist” coverage. (This is state-specific, so please read your policy.)

3. The RV or automobile is repairable.

4. The owner of the automobile or RV is the party who is requesting diminished value.

Diminished Value
One covered loss to your RV or automobile that the insurance company is not required to notify you about is diminished value. Diminished value is the difference between what your RV or automobile was worth before the accident and what it is worth now after it has been repaired. An accident can negatively affect the actual cash value of an RV the same as it would to an automobile. In certain instances, a potential buyer may not purchase an RV simply because it has been involved in a prior loss, even though it has been repaired properly.

There are several factors involved when determining whether an RV has sustained any diminished value. Just as in purchasing an automobile, you would look at the year, make, model, condition, estimate of repair and any previous losses. All these factors are taken into consideration when evaluating whether an RV has inherent diminished value. The RV’s age and the severity of the damages are the main aspects. An automobile experiences depreciation regularly, and so does an RV. As an RV ages, it experiences normal depreciation and wear and tear from everyday driving. Diminished value potential decreases as the vehicle ages to the point where it is nonexistent.

Prerequisites
The law does not require the insurance companies to tell you about your right to pursue a diminished-value claim with them. However, they are required to make you whole again and that may involve their compensating you for the loss in value of your RV. This varies from state to state, and there are several prerequisites to qualify for diminished value (see sidebar).


Diminished value is a subjective loss, and not every RV or automobile will qualify. All these factors must be evaluated. Then, a professional opinion must be obtained, verifying that the accident negatively affected the value of the damaged vehicle. If the answer is yes, and the RV or automobile does have diminished value, the next question is how much?

Diminished Value Appraisal
A professional appraiser will not apply any simple formulas to calculate diminished value. First, they will determine the actual cash value of the vehicle before the accident to calculate a base price. Then, they will conduct a forensic review of the estimate and any damage photos provided. Appropriate weighting will be given to the extent of the damages. For instance, frame, structural and safety systems will carry heavy weighting, since potential buyers will often not consider purchasing an RV or automobile that has sustained these types of damages. The appraiser will then use their professional opinion to determine what, if any, is the diminished value.

The most important thing is to consult a professional appraiser to receive a free initial consultation regarding diminished value. A normal diminished value report will run between $300 to $500, depending on the appraisal service you hire. It is well worth the cost to ensure that you are getting a fair and equitable amount for the loss in value of your RV or automobile.

Theron Williams, co-owner of Expert Appraisal Group www.expertappraisalgroup.com, is a licensed property and casualty insurance adjuster with extensive experience evaluating and estimating vehicle damage. While working at one of the largest nationwide insurance companies, he developed, implemented and managed their diminished value unit, expanding it to a team covering an eight-state region.

5 Responses to “Diminished Value | A Hidden, Recoverable Insurance Claim

  • My brother has just got an accident. He’s okay but the car is not. It’s been almost a complete mess. He needs to see this information because he’s worrying as to how much would be its diminished value.

    • Marketing
      3 years ago

      Oh no! So sorry to hear that, Joy. Hopefully he’s ok! Feel free to share this article with him if you’d like.

  • Patricia Cook
    3 years ago

    We purchased a 2019 Keystone Cougar Half-Ton 27RES on December 1, 2018. On January 12, 2019, the trailer was delivered (winterized and unused) to Camping World of Colfax, NC for a scheduled appointment to have a paint protection application. The trailer exterior was damaged at the shop which required a trip to the body shop 2 times. When it was delivered home on February 21, 2019 it had extensive water damage in the bedroom – 6 inches of water inside the window cavity. The wiring harness was not operating properly, the window frame was broken, the front wall was soaked, the mattress is covered with plastic and wet, the comforter was soaked, the pillows are wet and stained, the carpet is soaked, the cabinetry has been damaged, the tv mount is not installed properly, the slide out does not operate and they are blaming all of this on the manufacturer – Keystone. The trailer was in perfect condition when it left my home. Camping World says there is no diminished value – however I tried to trade the trailer in with them and they said it is not worth what I had paid for it.

  • I am experiencing a similar situation. We purchased a brand new Forest River destination trailer from Gander RV, owned by Camping World. On the walk thru before closing, a stain on the floor of the bedroom was pointed out to us and they told us it is from the glue used in the installation of the floor. Rather than wait 2 months for the material to be delivered they made a stipulation to accept delivery based on the repair of the floor when the material arrives. 2 months later the material arrived and when the tech removed the stained vinyl flooring black mold was everywhere under the vinyl floor. The tech reported the mold was active as the sub floor was wet and glossy. Gander RV picked up the trailer 3 weeks ago and I have heard nothing from them despite phone calls with no response other than someone will call. I hope not to have to hire an attorney because I will rescind acceptance of the coach based on misinformation as to the cause of the stain. I don’t think we can ever live in that coach because they do not know the cause of the mold and it is probably in the walls and under the floors. I wrote to the CEO of Camping World on the onset and his aid responded that they will make Forest River aware of the situation, but that was 3 weeks ago. I am writing one more letter to the CEO, Marcus Lemonis hoping I will get a positive response. I always said there is thing worse than a used car salesman and that is the RV people who sell RV;s, new or used.

  • While traveling from New Mexico to Pennsylvania. While in Texas a semi truck backed into my 2020 Keystone Raptor 413 Toy Hauler. We were parked at a travel center in Texas. My family and were resting in out 5th wheel when we felt a jarring impact. All our exterior lights were on and there was a large open space on the left side of us. A semi truck driver attempting to back his trailer into the empty spot next to us managed to hit our 5th wheel. The trailer smashed the large window, punctured the roof, tore off the shoreline connection, tore apart the fuel tank and Guage ( for any toys like atv’s) and damaged a 5ft section along the side. Dealing with their insurance company has been horrible. It has taken them 4 weeks just to determine what the commercial carriers insurance covered. My family and have been living in it since the accident. They haven’t even offered to have someone cover the 3ft by 4ft hole in the side or temporarily patch the roof so water doesn’t flow freely into many areas when it rains. We have had a loss of use of our 5th wheel as well as diminished value. Looks like this may end up in litigation.

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