California

A Basic Overview

Expanded Narrative

An Objective Overview of

Diminished Value Laws

in California as reviewed by

J. D. Howard

CALIFORNIA IS AN  EVOLVING  DIMINISHED VALUE RECOVERY STATE …

There is an over-abundance of Diminished Value appraisal services being promoted on internet search engines. Sadly, too many of those sites are run by unqualified hustlers out for a quick buck. There are only a hand full of qualified service providers that know what they’re doing and can be relied upon to tell the truth. This web site is among that hand full.

As noted above, California is an Evolving Diminished Value Recovery State. If your vehicle sustained collision damage due to the negligence of the other party, that other party (by and through their insurance company) owes you any Post-Repair Residual Diminished Value to your vehicle. IF the at-fault party is Not insured, and you have Uninsured Motorist Property Damage (UMPD) coverage on your own auto policy, you may recover your vehicle’s Post-Repair Residual Diminished Value from your own insurance company. NOTE: Some sub-standard insurance companies have begun to put Limits on their UMPD coverage - Read Your Policy !

While California has no “Reported” Case Law precedent supporting recovery of a tort victim’s Post-Repair Residual Diminished Value, there is a Civil Jury Instruction (CACI3903J) that was modified in 2016 to allow such recovery. Following is a quote from CACI3903J. The modification of 2016 appears in Bold !

“To recover damages for harm to personal property, [plaintiff] must prove the reduction in the {item of personal e.g. automobile]’s value or the reasonable cost of repairing it, whichever is less. If there is evidence of both, [plantiff] is entitled to the lesser of the two amounts. However, if you find that the [e.g. automobile] can be repaired, but after repairs it will be worth less than it was before the harm, the damages are (1) the difference between its value before the harm and its lesser value after the repairs have been made plus (2) the reasonable cost of making the repairs. The total amount awarded may not exceed the [e.g. automobile]’s value before the harm occurred.”  (Citation to LexisNexis and Judicial Council of California, Civil Jury Instructions, pages 794-797).

Because California Courts have been slow to recognize this updated version of CACI-3903J, our usual  Recovery Guarantee  benefit will not apply !

For a case to become a “Reported” Case Law precedent, a trial level case must be appealed and reviewed by the Appellate Court. Once an Appellate Court (or higher court) decision is handed down, the elements of that decision become “Reported” and relied upon as precedent in future cases of similar elements. While there is an emerging pattern of recovery for Post-Repair Residual Diminished damages at “Trial Level” courts, insurance companies have declined to “Appeal” such decisions for fear of an “Appellate Court” decision setting precedent on all future cases.

A Diminished Value Appraisal is only worth the cost, when it is a persuasive document leading to the recovery of Diminished Value damages ... A Diminished Value Appraisal "Estimate" ... Honestly Expressed ... and combined with knowledge of the Diminished Value LAWS in a consumer's given state, are necessary elements of consideration to evaluate pursuing a Diminished Value recovery ...

Gradually, lower courts (especially Small Claims Courts) are becoming more cognizant of the CACI3903J revision and are awarding Post-Repair Residual Diminished Value judgments.

For the average person, enforcing their Right to Recover their Post-Repair Residual Diminished Value is most easily pursued by utilizing the Small Claims Court (kind of a Judge Judy type of environment) system. No attorneys are allowed. The Rules of Civil Procedure are more informal. Costs are more reasonable (recoverable with judgment) and the process is faster. Though Small Claims Court authority is limited to only $10,000.00, recovery of that amount + costs + potentially our appraisal fee, can be preferable to hiring an attorney to file in District Court and have your case drag out for years.

NOTE: IF the accident were your fault ... Check with your tax advisor. You may (operative word “may”) be able to deduct your Post-Repair Residual Diminished Value from your income taxes as an  “Uncompensated Casualty Loss”.

NOTE: IF you have a companion Personal Injury claim, arising from the same accident, DO NOT file suit solely for your Post-Repair Residual Diminished Value. California does NOT allow a plaintiff to “Split” their causes of action. Seek Further Advice !

UPDATE 2023:  When this text was originally composed, and a California consumer was harmed by an uninsured or under-insured at-fault vehicle, the harmed consumer could recover Diminished Value via the Uninsured Motorist Property Damage (UMPD) coverage on their own auto insurance policy.  There is now a growing trend to LIMIT or ELIMINATE Property Damage from Uninsured Motorist auto policy coverage.   This trend effectively precludes Diminished Value recovery under the terms of your own auto insurance policy.  Review this subject with your auto insurance Agent before you purchase or renew your auto insurance.  Because of this growing trend, we have had to change the answer to the Uninsured Motorist question (above) from YES to NO !          

If You Don’t Stand for Something . . . You Could Fall for Anything !

Notwithstanding what other web sites may have you believe, there are only 3 (yes, only 3) general categories of Diminished Value that impact consumers …

• Immediate / Inherent Diminished Value is the Loss of Value of a damaged vehicle immediately upon infliction of the damage.
• Post-Repair Residual Inherent Diminished Value is, as the title implies, that portion of the Inherent Diminished Value that was Not restored through the repair process.
• Repair-Related Diminished Value is that portion of a vehicle’s Loss of Value that is directly related to a less-than-optimal repair work product. Repair-Related Diminished Value is Not owed by the at-fault party. After all, it is not their fault that repairs to your vehicle were defective. UNLESS …
  • The insurer of the at-fault party directed the repairs to a specific repair facility (or influenced your selection of repair facility). At that point, the insurance company is on-the-hook for repair defects and it becomes more of a Repair Warranty claim than a Diminished Value claim.
  • A Repair Warranty claim would require physical inspection of the repaired vehicle. We may be able to recommend a local resource to help you facilitate your Repair Warranty claim.

FYI . . . DRP Agreements . . .
DRP (Direct Referral Program) Agreements do exist (in writing). Under the terms of a DRP agreement, a body shop surrenders virtual control of their facility, to an insurance company, in exchange for that insurance company’s promise to promote that body shop to their insureds and claimants. All decisions as to method of repair and parts to be used are dictated by the insurance company. We’ve actually read DRP agreements that stated “the vehicle owner shall remain ‘Blind’ as to any difference of opinion that may arise between [insurance company] and [this] shop”.

Your FREE Diminished Value Estimate comes direct from … J. D. Howard.

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