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USAA Diminished Value Letter

by Diminished Value Car Appraiser on November 26, 2016

Action: Appraisal Clause Dispute Resolution of Diminished Value.USAA-Insurance-1-Star

Introduction: This report has been prepared to determine the potential impact to Claimant 2014 Honda Odyssey value as a result of a collision loss dated 7/5/2016.

Diminution in Value: Georgia courts have said that a person’s diminishment of value is the difference in the value of that property (automobile) before and after the accident.

Evaluation: I have reviewed all estimates, supplements, photographs, and CARFAX © report to determine if Mr. vehicle had sustained Diminution in Value.

Pre-Loss Vehicle Value: Pre-loss value was determined by utilizing N.A.D.A. (National Auto Dealer Association)® The NADA value of $28,200.00  was used to determine the pre-loss value.

Repairs: The 2014 Honda Odyssey sustained damage on 7/5/2016 from an automotive accident. The total amount of repairs came to $12,750.37.  The cost of the parts alone was $6,250.41.  49% of the repairs were in parts.  The repairs were to the front end of the vehicle.  The total dollar amount of repairs does not reflect necessarily the amount of damage a vehicle sustained.

CARFAX©: CARFAX© shows one owner.  CARFAX© shows this loss registered as “minor to moderate damage.”

Conclusion: Inherent DIV is subjective and determined solely during the negotiations between the willing buyer and the seller.  It would be up to the consumer purchasing the vehicle to determine if the vehicle had lost any value after all facts are known or by the person selling the vehicle if they wanted to offer it for sale at a lesser price than fair market retail.  I evaluated DIV in the amount of $1,750.00.

DIV is not measured on repair costs alone the actual damage the vehicle sustained must be evaluated.

I arrived at my value utilizing the following methodology:

Third party diminution is an element of the tort claim presented against a wrong-doer for the perceived difference in value before and after a vehicle has been damaged. It is a difficult item to measure and subjectively apply. In order to consistently apply measures in determining diminution of value, USAA has provided guidelines consistent with court approved measures for determining appropriate diminution values in relationship to the nature and extent of the damages sustained by the vehicle.


USAA uses the following consistent methodology to determine the expected diminution in value when such diminution may exist.


Vehicle Actual Cash Value (ACV): This value is established based on state specific guidelines when determining a vehicle’s market value during an insurance settlement. Factors may include a statistical market survey, NADA, Kelly Blue Book, or other jurisdictionally compliant evaluation sources.


10% of ACV: As is the case in most loss of value calculations, this is the percentage amount of a vehicle’s value that establishes the base diminution value amount for which all additional modifiers apply. The value is directly relational to the vehicle’s market value prior to the loss.


Adjusted ACV x Damage Modifier: As damage severity increases, so too does the perception of an amount of a diminished value. The damage modifier range and guidelines take into consideration repaired damages as small as a parking lot ding to as large as severe structural and mechanical repaired damages. It is important to

note that in some minor accidents the 0.0 modifier is appropriate as no loss of value would have been sustained.


X Mileage Modifier: The ACV has been established based on market value. A gas engine vehicle having an excess of 100,000 miles has established diminishment of value equal to or greater than a diminish in value resulting from a properly repaired collision. In other words, the vehicles historical use has already reached a diminishing threshold that a proper repair would not exceed. Generally, the modifier is a factor of the actual mileage of the vehicle and the mileage where the vehicle no longer would be considered for retail resale by a dealer.


X Prior Damage Modifier: Because diminished value is subjective and is being presented during resolution of an insurance claim, the same standard applied to the insurance claim should also apply to historical damages to the same vehicle. The damage modifier is intended to address prior repairs to the same vehicle as they

would apply to the overall diminished value related to this vehicle as a whole. In other words, if the vehicle already was damaged to a relative percentage of the currently repaired damages, the prior repairs would also have an overall effect on the diminution as a whole.


X Title Status Modifier: If the vehicle has a salvage or branded title, there would be no further diminishment of value as a result of a repaired partial loss.


Total Assessment: The total assessments for the potential diminution in value after all factors have been addressed, as they apply to this vehicle and this loss.


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