Diminution of Value
Diminution of value refers to the difference between the value of the vehicle before the accident and its value immediately afterwards.
According to the U.S. Department of Transportation, National Highway Traffic Safety Administration there were approximately 9.7 million police-reported traffic crashes in 2012. That means each year hundreds of thousands of exotic and high-performance vehicles like Ferrari, Maserati, Aston Martin, Range Rover, Porsche, Mercedes, etc., are involved in collisions. And anyone who has ever owned or contemplated owning a piece of machinery in this upper echelon is guaranteed to know a few things: first, these vehicles are incredibly expensive to repair no matter how minute the damage may be; and second, once these vehicles suffer any sort of damage (structural or body), their resale value plummets by the thousands (diminution of value). It is for this reason that an area of the law has been created to compensate individuals whose automobiles have been damaged.
Florida has adopted a legal treatise known as the Restatement of Torts (“Restatement”). The Restatement was developed by the American Law Institute and serves as a guide of sorts for judges and attorneys with respect to a specific set of topics. Now more than ever, common sense tells us that when a vehicle is damaged in an accident and is subsequently repaired, the value of the vehicle has still been reduced. This is known as diminution of value. Advancements in technology and the creation of automotive information websites like CarFax have equipped the secondary market–i.e. buyers of pre-owned automobiles–with extensive research capabilities and increased buying power. In a matter of minutes, would-be buyers can retrieve a complete vehicle history for several dollars. When the market dictated by these buyers determines that your vehicle is worth less as a result of this accident, the law has recognizes that simply repairing the vehicle may not make the injured party whole.
Diminution of value thus refers to the difference between the value of the vehicle before the accident and its value immediately afterwards. Section 928 of the Restatement holds that when a person is entitled to a judgment for harm done to his vehicle (harm that does not constitute complete destruction or a total loss), they are entitled to compensation for:
(a) the difference between the value before the harm and the value after the harm…and;
(b) the loss of use.
It is also worth noting that the risk of reasonable but unsuccessful attempts to repair is borne by the tortfeasor so that the damages recoverable may increase if repairs are unsuccessful.
Loss of Use
Loss of use is a separate claim distinct from that of diminution of value. However, like its counterpart, its origin stems from common law but has since been included in the Restatement, Section 931. A claim for loss of use compensates a vehicle owner for the time period during which the vehicle is being repaired. This period of time includes the duration reasonably necessary to procure parts for the damaged vehicle and complete the repairs.
To quantify ‘loss of value’ is terms of recovery, the rental value of an equally equipped car is indicative of the loss suffered. However, there is no requirement that you rent the same or similar vehicle in order to make a claim. In fact, Florida case law has indicated that renting a vehicle in any sense while the damaged one is being repaired is not a prerequisite to recovering for this loss of use. One must only have been deprived of the use of your automobile for some period of time.
Based on the complex issues that often arise in this area of the law it is wise to consult an experienced Fort Lauderdale diminution of value attorney who is seasoned in these matters. If you believe that you have been deprived the use of your vehicle or have suffered a decrease in value of your vehicle, contact your Fort Lauderdale diminution of value attorneys at Cohen & McMullen, P.A.