Rental car diminished value claim

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Jan 10, 2021
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My National rental was involved in an accident in Illinois and the other driver was at fault. The other car hit my car in a parking lot while it backing off. Police was called and I have the incident report.
The other driver’s insurance paid off the damage repair cost but denied the diminished value claim. Now Purco sent me a bill to ask me pay for the diminished value and some other fees.
Can anyone give me some advices on what should I do now? Thanks in advance!
 

VoR61

Jan 6, 2015
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From a policy standpoint, this is correct, as insurers will not cover diminished value. Additionally, renters are ultimately responsible for the rental while it is in their care, and National is only going to charge you.

However, each of these scenarios presents the challenge of the proper value to assign to the reduction in the value of the vehicle. I suggest that you negotiate with them for a lower number. You can then request that the other driver pay that amount.
 

Dwayne Coward

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Apr 13, 2016
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Unfortunately, rental agreements usually, make you responsible for any damage done to the vehicle while in your possession, which may include paying for diminished value, loss of use, and associated administrative fees, even if the damage is caused by a 3rd party. State law may provide for limits on these type so of claims, so definitely check on that. If State law allows diminished value, then basically you would be responsible for paying it, and then seek reimbursement from either the insurance company (yours or the 3rd party responsible) or directly from the individual themselves.

If the individual or their insurance isn't willing to pay the full claim you may need to seek legal assistance to determine if one or both has any liability to pay the claim or you may be able to use the States small claims process, depending on the amount. Another option is to file with your insurance if you have the coverage.

You can also try to negotiate with the company to either drop the claim or reduce it. The following post explains how best to do this:


Good luck, and please let us know the final outcome.
 

Skippy

May 30, 2019
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Did you have any secondary rental car coverage, perhaps through the credit card used for the rental?
 
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smd

Mar 14, 2018
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Can anyone give me some advices on what should I do now? Thanks in advance!
I suggest calling the other driver's insurance company and asking them how to proceed. They are ultimately going to be liable for any damages (although you may need to sue the other driver to recover them). The other insurance company may already have obtained a release from National or may negotiate on your behalf to avoid the eventual liability.
 
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Neil Maley

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Dec 27, 2014
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I second Dwayne’s advice to try to negotiate with the rental company for a lower amount. It is extremely rare for an insurance company to pay those fees. The usually sign off on their liability ending with payment of the damage.

We have seen a few cases over the years of those fees being reduced by negotiating.
 

smd

Mar 14, 2018
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I second Dwayne’s advice to try to negotiate with the rental company for a lower amount. It is extremely rare for an insurance company to pay those fees. The usually sign off on their liability ending with payment of the damage.

We have seen a few cases over the years of those fees being reduced by negotiating.

That's true for collision policies that cover damages to your own car. These often exclude fees/diminished value.

However, this claim would be under the other owners liability policy, which covers all liability of the driver.

This document from the Insurance Information Institute says liability policies will pay for diminished value claims in all states except Michigan.
 
Jun 24, 2019
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Whether or not anyone has insurance is irrelevant to the analysis. The driver and potentially the owner of the car at fault are responsible for the damages they caused. The renter of the victim car is contractually responsible to the leasing company for the damages to the vehicle.

Any of these parties may seek to protect themselves from loss by having insurance. For the facts OP has posted, the driver/owner of the car who hit OP's car is liable for damages. OP has agreed by the rental agreement to be liable for all damages to the leased car, regardless of fault.

My concern here is whether OP signed or agreed to anything in accepting the repair cost from the other driver's insurer which would waive or release the diminished value claim.
 
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Jan 10, 2021
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Thanks for all the suggestions! I was using Chase sapphire reserve for the rental but the chase rental insurance explicitly excluded diminished value claim.
I will ask Purco to see if they sign any waive or release with the other insurer. From my understanding, my best bet would be to negotiate for a lower amount for the claim then ask the other driver/insurer to reimburse that. I’ll keep this thread updated.
 
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Neil Maley

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Dec 27, 2014
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We advise you to use our contacts for the executives at the car rental company to ask for the amount to be reduced. They are the ones who get these kind of requests done. Purco wants every penny they can get.
 
Jan 10, 2021
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We advise you to use our contacts for the executives at the car rental company to ask for the amount to be reduced. They are the ones who get these kind of requests done. Purco wants every penny they can get.
Thanks Neil, that’s good to know. I’ll do that.
 
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Jun 12, 2019
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Thanks Neil, that’s good to know. I’ll do that.
I am curious on how they are proving their DV claim. I remember claimants making a claim and there has to be hard evidence that there is DV. Examples that we accepted is that the claimant had the vehicle valued after the accident and the value went down as a direct result of information from CARFAX, ISO or other reporting agencies. If the damage is minor with no heavy damage such as frame damage or a total loss, you can argue that the damage was repaired back to pre-accident condition. Sometimes, they as for loss of use, DV and admin fee on all claims and they just have a percentage they always ask for.

Insist that this is absolutely necessary because you intend to seek recovery from the party at fault. If they could not convince an insurance company of the DV, they should not take advantage that you do not handle claims on a daily basis. Maybe if they supply the proof, you can reach out to the other insurance company to see why it was denied. Use that denial basis when you speak to the rental company.

I get that your rental agreement allows the rental company to play these games but at the end of the day, if you don't pay, they have to prove to someone that the DV is legitimate. I honestly believe they make the experience so awful, you buy their insurance in the future.
 
Jan 10, 2021
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Purco sent me a DV report from Collision Appraisal Report Services (CARS) and the DV claim is based on that report. I think they use the pre-accident value and an accident severity score to do the calculation.

Purco use the CARS report to support their DV claim but the other insurer denied and said they do believe the car’s value is diminished after it got repaired based on the insurer’s internal appraisal report.

I don’t know if CARS is a good company to do the appraisal. Should I ask for other evidence to support the DV claim?
 

Neil Maley

Moderator
Staff Member
Advocate
Dec 27, 2014
25,519
27,959
113
New York
www.promalvacations.com
Purco sent me a DV report from Collision Appraisal Report Services (CARS) and the DV claim is based on that report. I think they use the pre-accident value and an accident severity score to do the calculation.

Purco use the CARS report to support their DV claim but the other insurer denied and said they do believe the car’s value is diminished after it got repaired based on the insurer’s internal appraisal report.

I don’t know if CARS is a good company to do the appraisal. Should I ask for other evidence to support the DV claim?
And I think the insurance company is correct which is why you should ask the executives at the car rental for proof.
 

smd

Mar 14, 2018
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Purco sent me a DV report from Collision Appraisal Report Services (CARS) and the DV claim is based on that report. I think they use the pre-accident value and an accident severity score to do the calculation.

Purco use the CARS report to support their DV claim but the other insurer denied and said they do believe the car’s value is diminished after it got repaired based on the insurer’s internal appraisal report.

I don’t know if CARS is a good company to do the appraisal. Should I ask for other evidence to support the DV claim?
Have you spoken with the other driver's insurance company and asked them about the situation? They may have settled this with National already. Or they may be willing to defend you.
 
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Jun 12, 2019
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Purco sent me a DV report from Collision Appraisal Report Services (CARS) and the DV claim is based on that report. I think they use the pre-accident value and an accident severity score to do the calculation.

Purco use the CARS report to support their DV claim but the other insurer denied and said they do believe the car’s value is diminished after it got repaired based on the insurer’s internal appraisal report.

I don’t know if CARS is a good company to do the appraisal. Should I ask for other evidence to support the DV claim?
I would still call the other insurance company on what they think of the report. Did they have their own appraisal done? Do they not rely solely on reports and require actual proof of DV? They are not required to defend you against the rental car company but they have a contractual duty to defend their insured. Impress upon the insurance company that any monies that you are paying for this DV claim, you will be collecting from their insured. Make them examine if the DV denial would hold up in court. At the end of the day, that is what going to happy if you are forced to pay. This would give them an incentive to help you. You can also reach out to the party at fault and warn them that their insurance company is not indemnifying you (make you whole) and you have no choice but to seek relief through the courts. Maybe with this much noise, the insurance company will renegotiate with the rental car company or give you the independent proof that a DV claim does not exist.
 
Jan 10, 2021
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I would still call the other insurance company on what they think of the report. Did they have their own appraisal done? Do they not rely solely on reports and require actual proof of DV? They are not required to defend you against the rental car company but they have a contractual duty to defend their insured. Impress upon the insurance company that any monies that you are paying for this DV claim, you will be collecting from their insured. Make them examine if the DV denial would hold up in court. At the end of the day, that is what going to happy if you are forced to pay. This would give them an incentive to help you. You can also reach out to the party at fault and warn them that their insurance company is not indemnifying you (make you whole) and you have no choice but to seek relief through the courts. Maybe with this much noise, the insurance company will renegotiate with the rental car company or give you the independent proof that a DV claim does not exist.
I got the Carfax report for that car today and it shows the car has been sold on auction. Not sure what’s the sale price but Carfax report has a History-based value which shows that the car’s current value is similar to the pre-accident value on the DV appraisal report. I sent an email to National today to ask them dropping the DV claim against me. If National refuses that, I’ll try to contact the insurance company to see if they are willing to help.
 
Jun 12, 2019
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I got the Carfax report for that car today and it shows the car has been sold on auction. Not sure what’s the sale price but Carfax report has a History-based value which shows that the car’s current value is similar to the pre-accident value on the DV appraisal report. I sent an email to National today to ask them dropping the DV claim against me. If National refuses that, I’ll try to contact the insurance company to see if they are willing to help.
That is great and it supports your case. Did you have to pay for the Carfax? You should seek reimbursement for the fee from the insurance company of the other driver.
 
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Jan 10, 2021
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That is great and it supports your case. Did you have to pay for the Carfax? You should seek reimbursement for the fee from the insurance company of the other driver.
Yeah, I bought the report from a 3P website. Not sure if that can be reimbursed but I don’t mind if it cannot since it doesn’t cost too much compare to the DV claim amount.
 
Jun 12, 2019
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I would argue that you bought it as a direct result of the accident. The insurance company refusal to pay the DV put you in a position to deal with the rental company on the issue of the DV. They are required to make you whole, you would not have to buy the report from CARFAX for a rental vehicle to prove that there was no DV if their insured was not negligent. I know its not much money but they should of communicated with you when the DV claim was denied.