Diminished value is described as a property losing its value after being damaged. Diminished value is mostly used when referring to vehicles that have been damaged.Read more about diminished value at Hansen Price . It can also refer to jewelry or artwork that has been damaged as well as other properties. Inherent diminished value is different from depreciation. This is because depreciation is predictable. One is able to predict that a certain property will lose its value within a certain period of time while with inherent diminished value, the loss is unexpected and sudden. For the vehicles, there are various accidents that may occur. A vehicle may lose its value when the owner does not have the ability to repair the vehicle perfectly so after being repaired it will cost less.
There is the immediate diminished value which refers to the difference of the resale value before it was damaged and the value after it has been damaged. Immediate diminished value is not mostly considered when one has claims on the damage of the property.Read more about diminished value at Hansen Price . There is also the inherent diminished value which most recognized and accepted in most parts of the world. The damage to the vehicle is measured by the value of the vehicle before being damaged and its value after the damage. There no buyer in the market who will buy a vehicle that has had damages in the past at the same price. Sellers will mostly reduce prices for their properties because of those damages. Sellers with damaged properties will, therefore, sell them at lesser prices since nobody would agree to buy them at the same price that they were bought.
Insurance agents also do not pay for properties that have diminished in value. There are diminished value appraisals which calculate the value of a vehicle after being repaired. Auto appraisal experts usually compile reports which are later used by people who are disputing diminished value claims which are mostly against insurance companies. The report usually measures the inherent loss in value of the damaged vehicle. However, there are no specific rules that are set to measure the diminished value since different vehicles lose their value differently.
There are countries whose insurance companies pay for properties that have diminished value while there are those that pay. This varies from one country to another. Austin diminished value appraisers in Texas does a very good job of evaluating the loss in value of damaged properties. Property owners should, therefore, research and are able to know if the insurance companies in their countries pay for properties that have diminished in value.Read more from https://en.wikipedia.org/wiki/Diminished_Value