Question:
The insurance company of the driver that caused damage to my
vehicle will pay only "book value." My vehicle is not totaled and
is mechanically the same as before the accident. This situation
will leave me "not whole," since the damages in my opinion exceed
the book value. Can I sue in small claims court for the
difference?
Answer:
Insurance companies look at
car accidents
from a financial perspective. Once it becomes more economical to
total out a car rather than repair it, they will do so.
Unfortunately, you don't have a say in that decision, even if you
disagree with the insurer's assessment and think that damages
exceed the car's value.
After an auto accident, insurance companies try to place you
back into the same position you were in before your loss; this is
referred to as "being made whole." This is done by repairing the
car to its pre-accident condition or paying the car's owner the
car's
actual cash value
(ACV).
All car insurance companies will pay only up to a vehicle's ACV,
which you call "book value," because this was the worth of your
vehicle at the time of the incident. An owner paid the value
of his car is theoretically back in the same financial situation as
before the accident.
If your car has already been repaired, then you have been made
whole in the eyes of the other party's insurance company and can't
sue for the value of the car. However, if you feel as if your car
has lost some of its market or resale value due to the accident,
then you can attempt to claim (or sue) for the diminished value of
your car.
Many car insurance policies don't allow requests for
diminished value
with claims against your own policy, but since you made a
third-party claim you don't have a contract with that insurer, and
this means that state laws will determine if you can make such a
claim.
If you want to ask for compensation due to perceived diminished
value of your vehicle, I'd recommend that you first check with your
state's insurance regulator
to see if such a claim is possible in your state. If it is, then
you'll need to submit proof of the alleged loss of value to the
insurer and negotiate from there.