Legal Question in Insurance Law in California

Pre-accident condition

My new, 2-week old car was hit, the impact caused extensive front end and frame damage. My insurance company said that repairs alone would put the car into it's original, pre-accident condition. This is obviously not true due to Inherent Diminished Value. The dealer shop repairing my car said they received payment for Inherent Diminished Value from their insurance company when one of their new cars was in an accident - simply because they knew about it and asked for it. As for pre-accident condition, how can it be if:

1) The warranty won't cover accident related problems for the next 3 years

2) I would have to seek payment for every problem my car has through my insurance company, who has already stated that it was restored to it's pre-accident condition, therefore the problem cannot be related to the accident

3) It cannot sell for the pre-accident ACV

4) It is impossible to recreate every detail that the factory used in the manufacture of the car since the factory is not involved in it's repair

I am having a diminished value estimate done plus will seek several trade-in value quotes once the vehicle is done. The law makes it mandatory to disclose an accident, how can an insurance company not factor this in?


Asked on 8/11/00, 11:16 am

1 Answer from Attorneys
Jeffrey Zinder Zinder & Koch

Re: Pre-accident condition

You are logically sound, but there are legal doctrines in California concerning damages to personal property. The measure of damages is the costs of repairs plus related incidental costs (which may include some of the items you list), if the costs of repairs are less then the value of the property immediately before the accident. If the costs exceed the pre-accident value then the car is a total loss and you are entitled to the pre-accident value plus un-used license fees, document fees and tax. If a new car, not sold by the dealer, is damaged in transit it is no longer considered new and this is a significant difference from a used car, previously sold and registered. This is an area of law that varies from State to State and the issue is currently being reviewed in a case pending in the California Supreme Court. Of course this response should not be considered as legal advise but merely a response to your question as to the general state of the law concerning recovery for damages to a used car. You should consult your own attorney to determine exactly how your claim fits into this picture as more specific details may change the amount of your claim.

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Answered on 9/14/00, 9:13 am


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