After a car accident, determining the fair market value of a damaged vehicle is crucial for insurance claims and financial recovery. In Louisiana, insurance companies assess the market value of a vehicle to decide whether to cover repair costs, declare a total loss, or compensate the owner through a property damage claim.
This article explains how fair market value is determined under Louisiana law, what factors affect a vehicle’s value, and how you can pursue a fair settlement from the insurance carrier.
What Is Fair Market Value in a Car Accident Claim?
Fair market value refers to the amount a vehicle would sell for in its pre-loss condition on the open market. If a car is declared a total loss, the insurance company determines how much the car was worth before the accident to calculate the payout.
The value of the vehicle is important because it affects whether the insurer will repair the damaged vehicle or declare it a total loss.
How Insurance Companies Determine Fair Market Value
1. Assessing Market Value
Insurance companies use several methods to determine the market value of a vehicle before the accident, including:
- Comparable sales – Researching prices of similar vehicles in your area
- Industry valuation tools – Using sources like Kelley Blue Book and NADA Guides
- Dealer quotes – Obtaining estimates from car dealerships
- Vehicle history – Considering prior accidents, modifications, and mileage
2. Evaluating Damage and Repair Costs
If the cost to repair the damaged vehicle exceeds a certain percentage of its market value, the insurance company may declare it a total loss. Under Louisiana law, a vehicle is considered a total loss pursuant to state regulations if repair costs exceed 75% of the actual cash value.
Understanding Diminished Value Claims
Even if a vehicle is perfectly repaired, its resale value may be lower than before the accident. This loss in value is known as diminished value. Louisiana allows vehicle owners to file a diminished value claim to recover the difference.
1. Inherent Diminished Value
This refers to the automatic loss in value a vehicle experiences after an accident, even if repaired correctly. Buyers often prefer cars with no accident history, lowering the resale value.
2. Repair-Related Diminished Value
If repairs are done poorly or replacement parts do not match the original, the vehicle’s value may be further reduced. In this case, the owner may claim repair-related diminished value.
Steps to Recover Fair Compensation for a Vehicle After an Accident
1. Gather Evidence
To prove the value of your vehicle, collect evidence such as:
- Repair estimates and receipts
- Comparable vehicle listings
- Pre-accident photos and maintenance records
- Professional appraisals
2. File a Claim with the Insurance Company
If the accident was caused by another driver, you can file a claim against their liability insurance. If you are filing with your own insurer, check your insurance policy for coverage on total loss or diminished value claims.
3. Negotiate a Fair Settlement
Insurance companies may offer a settlement that is lower than the actual market value of the car. An experienced attorney can help negotiate a better offer.
4. Consider Legal Action if Necessary
If the insurance company refuses to pay fair compensation, you may need to file a lawsuit to recover the total damages. Louisiana law allows car accident victims to seek legal action for both personal injury and property damage claims.
Get Legal Help for Your Car Accident Claim
If you are struggling to get fair compensation for your vehicle’s value after an accident, Rozas Injury Law, LLC can help. Our experienced attorneys understand Louisiana diminished value laws and will fight for the compensation you deserve.
Call (225) 343-0010 today for a free consultation. Let us help you recover the full value of your vehicle and secure a fair settlement.
FAQs
How does Louisiana law define a total loss vehicle?
A car is considered a total loss if repair costs exceed 75% of its actual cash value.
Can I recover diminished value even if my vehicle is repaired?
Yes, Louisiana allows vehicle owners to file a diminished value claim to recover the difference between pre- and post-accident value.
What factors affect my vehicle’s fair market value?
Mileage, condition, accident history, and market demand all play a role in determining a vehicle’s market value.
What should I do if the insurance company’s settlement offer is too low?
You can negotiate with the insurance company or hire an attorney to help recover the full value of your claim.
How long do I have to file a property damage claim in Louisiana?
Under Louisiana law, you generally have one year from the date of the accident to file a claim for vehicle damage.
