Diminished Value Claim Alaska: 5 Ways Insurers Try to Avoid Paying

Diminution simply means reduced, as in the word "diminished." When a car is involved in an accident and then repaired, its value is reduced. This damage lowers the vehicle’s worth and may sometimes discourage a buyer from paying market value for your car if you’re selling. Diminution in value is the difference between the initial and post-repair market value of your car in Alaska.  Unfortunately, the companies that provide insurance coverage are usually able to protect their profitability and, through a variety of policies or legal loopholes, will often attempt to avoid paying a valid claim.

Further, in an effort to reduce the amount of money paid out for a claim, insurers may take such actions as intentionally delaying the processing or payment of a legitimate Diminished Value Claim Alaska. You can stand your ground and receive a fair payout if you recognize how insurance companies bend laws and policies to their advantage.

In this blog, we will highlight the most frequent tactics used by insurers to dismiss diminished value claims, along with recommendations on how to effectively contest them.

Claiming Diminished Value isn’t included in Your Insurance Coverage.

Denying diminished value coverage while asserting that the policy only covers physical repairs is one of the most typical tactics used by insurers. Several insureds fall prey to this deception, despite contrary state laws. Examining your policy and state laws will help you challenge this. Additionally, as insurers might not want to make false claims in writing, so ask for written justifications for claim denial. 

Claiming Repairs Restore Your Car’s Full Value, So No Payout is Needed. 

Some insurance companies claim that repairing a vehicle to its original factory condition will restore the totality of its value. Therefore, if you have had a professional appraisal performed by an independent appraiser, you can challenge this assertion by providing proof of loss based on the total value of your vehicle after the repairs as compared to the appraised value prior to these repairs. Additionally, you can demonstrate that the value of your vehicle has decreased, in part, due to the accident history by providing your dealer with the results of the dealer's offer to buy the vehicle if it is sold as-is or at a reduced value due to accident history.

Claiming the Insurance Company Will Only Pay if You Sell the Car

Insurance providers can claim that selling your vehicle is essential to demonstrate its loss in market value, arguing that the lowered value is questionable unless it is validated by a transaction. This claim is misleading because devaluation does not hinge on a sale. To prevent rejection of your claim, assemble market data and obtain a professional appraisal to authenticate the reduced value of your vehicle.

Using Biased Calculations & Shady Appraising Practices. 

Insurance providers need to make profits for their businesses, so at some point during the claim's process they could misrepresent or miscalculate your loss using improper function or formula. For example, insurance providers compare your vehicle to other similar vehicles, and those other vehicles may be similar to yours based on equipment packages but may not have been in a collision. Or they may use an outdated model or a faulty depreciation function.

You can refute the insurer's determination by requesting a complete breakdown of their appraisal and by using an independent party appraiser to support your challenge to the value of your claim. 

Postponing Your Claim Until the Statute of Limitations Is Over. 

Insurance providers commonly delay processing claims to prevent claimants from filing lawsuits. Insurers employ several tactics to accomplish this including the request for excessive documentation, not returning phone calls, requesting a second or third review of the same submission, etc. When challenging the way an insurance company delays claims, it is important to understand the statute of limitations in your state, send written follow-up letters, and document delays in a concise manner.

Some insurance delays are reasonable, including prolonged investigations aimed at ensuring claims are managed correctly or confirming their authenticity, while others occur when insurance companies attempt to take advantage of claimants to save money. To hold an insurer responsible, legal assistance could be required, sometimes. With ADR-Claims, claim your vehicle’s true worth with expert legal support and guidance every step of your claims journey. 

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