When something diminishes, this means that its sense of value goes down as a result of multiple factors. We shall look at such factors shortly. Valuable items such as cars, houses, and property give one a sense of security. Which is why so much money is spent in having them insured because they are believed to be an investment and will be of good use shortly. Unfortunately, not everyone understands the dynamics of property ownership and what should be done to safeguard them. This timely and informative article will shed some light on everything there is to know about properties such as cars, houses, etc. and what happens when they diminish in value. We shall also see what roles the insurance companies have to play to safeguard the security of your properties.
Beginner’s guide to diminished value appraisal
What is diminished value?
This means that our target readers are those that have never handled properties directly and have no idea how exactly how they are to be handled. Your property is your life, and it is important for you to understand how to go about their management, so they will add value to your life rather than make you count your losses. We shall shed more light on cars and what leads to its diminished value.
Cars lose their financial value when they undergo a series of repairs at the mechanic’s garage, causing them to lose their initial attractive shape and appearance.
They also diminish in value when they are involved in accidents, whether major or minor, so long as their internal and external appearances are dented and disfigured. Nothing much can be done for them to regain their former glory which is already lost. There are different types of diminished value; Immediate, inherent and repair-related.
Immediate diminished value
This is the kind that occurs even before the repairs are completed. It is already an assumption that the car’s former beauty and glory will not be restored.
Inherent diminished value
In this case, claims are opened when the repairs are done, but the value of the car diminishes to a lower level than those that are for sale.
Repair-related diminished value
As the name suggests, claims are opened when the car loses its value due to the shoddily done repairs that cause it to depreciate.
Contents of a diminished value appraisal
- In our case, we are focusing on cars, and so this is what you must have in your hands;
- The full names of the owner of the car as per their legal documents. This will help in making the appraisal process go faster.
- The details of the car such as the name and brand.
- The history of the car. This will come in handy because this piece of information will help in detecting the value of the car because you will get to know how many times it has been involved in an accident and how many times it has been taken to the garage to repair damages both major and minor.
Involve your lawyer
Don’t take matters into your hands especially when you are new to the field. Involve a competent lawyer who specializes in such and will go as far as advising you on the proper steps to take by the law.