An independent appraiser provides a diminished value appraisal as a written document. It states the dollar loss in resale value caused by the crash. A report uses real market data to counter the 17c formula that insurers often start with.
What an Independent Diminished Value Appraisal Includes
Think of a strong diminished value report as your car's case file. Reed Auto Appraisers details what its reports include:
- a review of the damage and the repairs, examined item by item
- an itemized worksheet of what affects your car's market value, plus a full analysis of that value
- sales records from the exact day the loss happened
The last point counts the most. The appraiser studies cars like yours that sold near the time of the crash. Every figure should tie back to a sale or a pricing guide the adjuster can look up.
Find out which standards the report is built on. National standards for appraisal work come from the Appraisal Foundation, which publishes USPAP. Those standards extend to personal property such as cars, not only to houses.
Diminished Value Appraisal Cost
The prices firms publish fall within a fairly tight range. Snapclaim reports that a professional appraisal usually runs from $300 to $600. Prices from two companies are posted on their sites:
- For a file-based report, Reed Auto Appraisers starts at $350. When an on-site check is added, the cost is $475 to $775, depending on travel distance.
- DVCheck charges $399 for its appraisal, and more for exotic or high-end vehicles.
There is a good reason the inspection adds to the cost. Reed points out that an inspection-backed report often carries more force when you negotiate, arbitrate or go to court. If your claim is minor, a report from the files may be all you need.
When the Fee Is Worth It
Begin with a rough sense of the loss. The loss usually lands near 10% to 20% of the repair total, per a study in the NAIC Journal of Insurance Regulation. For a $10,000 repair, the claim amount would likely be $1,000 to $2,000 under that rule. Paying a few hundred dollars is a sensible choice in that case.
Small repairs change the calculation. When the repair bill is just $2,000, the loss may only come to $200 to $400, so the appraisal fee might take up most of that amount. For a claim that small, send your own figure along with the repair paperwork first.
In plain words, Kelley Blue Book offers the same advice. Get a certified appraiser once the expected settlement is big enough, and schedule the work after the repair is done. You get that first figure from our free estimate by answering three questions.
How to Choose a Diminished Value Appraiser
Find someone who answers to you, not to the repair shop or the insurer. Ask about these points before you send any payment:
- If the report meets USPAP rules.
- Whether a car inspection is part of the price.
- The date of the sales data and which records the appraiser used.
- Find out if the appraiser will respond to the adjuster and, when needed, appear in court.
That last question matters a great deal. These claims still rely most of all on expert testimony, according to a 50-state survey by Matthiesen, Wickert and Lehrer. A diminished value appraiser who backs up the findings is more valuable than a cheap paper report.
Licensing rules are not the same in every state. Massachusetts licenses motor vehicle damage appraisers through a state board. A file-only report does not require a visit, so the appraiser can live far from you.
If the Insurer Disputes Your Claim
An appraisal report does not guarantee that the insurer will pay. The Washington insurance regulator cautions that an insurer may still dispute the report. When you send the written demand letter, include the report, and save a copy of each.
The law of North Carolina provides for an appraisal process under G.S. 20-279.21. It is for claims filed against a driver's liability insurer when no one contests fault. Suppose the two sides differ by over $2,000, or by more than 25% of what the car was worth before the crash, whichever figure is smaller. At that point either side may call for an appraisal.
Within 20 days, each side names its own appraiser and covers the cost. Either side can turn to a magistrate to pick an umpire if the two appraisers cannot agree within 15 days. As one North Carolina firm points out, the appraisal process decides the dollar amount of the loss, not whether the policy pays for it. If talks still do not work, a lawyer can look at what you should do next.