Diminished Value after accident

[Nooner]

A few weeks ago I was in an accident on my Super Tenere. While riding past a gas station a drunk woman pulled out and nailed me. Fortunately, when I saw her pulling out I rolled on the throttle and was able to keep the bike on her wheels, saving myself from a tumble.


She ended up being cited for failure to yield and DWI (she blew a .130 quite a bit AFTER the accident...), so her insurance company has accepted liability.


The insurance adjuster provided an estimate of about $4500 to replace the main frame and subframe, and despite needing a new frame it sounds like they do not want to total the bike... I have the bike at the most reputable local Yamaha dealer and it is my hope with a reasonable estimate that they will total the bike, but it sounds like they don't want to... SO I am looking into diminished/depreciated value. Anyone have an experience with that in a motorcycle with the frame replaced? I am sure that if I were to try to sell it with a replacement frame it would not sell for close to the value... the bike had under 1500 miles on it at the time of the accident...

 

[Don in Lodi]

Well, here's a counter for my thoughts on Cheesewiz's post. I guess they do replace frames.

 

[Maxified]

Wonder what the labor cost is associated with a frame/sub-frame replacement? Can't be cheap...
Major parts, minor parts, labor; it all adds up pretty quick.

 

[Clevermonkey]

In oregon you have a legal right that the vehicle be repaired so that it is in the same condition as before the accident. I would see if your state has a similar law. I have used it on cars to get them to total when they didn't want to by handing them a list of every minor thing broken in the accident, and letting them know I expect all the body parts painted to match.

 

[Checkswrecks]

Congratulations on surviving what could have been a major injury accident! I hope you said a prayer and recognized that a lottery ticket would have been worthless, as you just used up that day's luck.

Technically, that's about the best repair that you could hope for. Congratulations. Two things you will need to watch for afterward. The first are the electrical gremlins. Unfastening most of the electric connectors like this doesn't harm anything but technicians sometimes don't get them all seated. If in the future you get something weird going on that people can't seem to figure out, then suspect a not-quite-seated electrical connector.


The other potential issue is with your VIN. Check into your (Texas?) Motor Vehicle rules on changing VIN, or in some States having the mix of VIN and engine number change. Also talk to your insurance company because your policy will most likely need to be changed.

Financially, yes there will be an impact and how much it is going to depend on who you sell to. The big question for the insurance is whether this will show later (CarFax, Etc) as an accident or as a Salvage/Reconstruction. Since you are getting a new VIN there is a chance that it may even escape CarFax, but I doubt it. Each of these three will result in a different amount of change.

Best case is no record. Since I doubt that will happen and if the great computer records it as an accident, when you later have a potential private buyer who has a choice between your bike and an identical one, your buyer has negotiable leverage. If you are lucky and a good salesperson, that means there may be no change, depending on the individual.

Worst-case, is if you were trying to use the bike as a trade in to a dealer and it has a salvage title you may lose up to a third the value of the bike.

 

[toadady]

about years ago i had a little suzuki savage that some numbskull made a left turn in front of me. wound up he had no ins, and I had full coverage. bike was very low milage and I chose to have the frame replaced rather than totaling it. Suzuki shipped a new frame with the same VIN as mine only it said "replacement frame" then the dealer took a saws all and chopped the steering neck where the frame was and had to ship it back to Suzuki. other than the dealer not adjusting the rear brake rod the little bike was fine.

 

[Nooner]

I don't know what I'll do with the bike in the future, but the important thing to me is to capture every cent of cost for the repair, that means parts, labor, and diminished value.

Right now the total for the repair is on the north side of $6500 (and that doesn't include the Jesse Bags or the meundies that I soiled)

The shop estimated 22 hours for labor on the frame replacement. I am pretty confident that they will be diligent, it is the dealership I purchased the bike from, and when they prepped it for delivery they checked every fastener on the bike and marked it with a silver sharpie. I am asking them to replace every fastener that needs removed, and there is an exhaust leak, so the Ins. co agreed to replace the exhaust can. They said that if there is damage to the headers that those can be replaced as well. I would like to use Arrow Headers and an Akro can, the net cost should be about the same as the stock exhaust system. I'll have to do something about fueling though...

Additionally, since the rear rack needs to be replaced and the stock stuff costs more than the altrider rack, I plan to have them install the altrider rack with Givi provisions. I've used Givi topcases on a number of my previous bikes and think they are perfect for general commuting duty.

Again - my preference is that the bike be totalled because I can not be certain that gremlins won't haunt me in the future, which is why I think diminished value needs to be captured now, and I will expect to be compensated for the diminished value if the insurance co. does choose to repair it. I will not accept any parts on the bike other than OEM Yamaha Parts or my selected aftermarket parts.

 

[Ironhand]

FYI - not every state recognizes the concept of dimunition of value:

Texas: In Carlton v. Trinity Universal Ins. Co., 32 S.W.3d 454 (Tex. App. - Houston [14th Dist.] 2000), the Court held: “Where an insurer has fully, completely, and adequately ‘repaired or replaced the property with other of like kind and quality’ any reduction in market value of the vehicle due to factors that are not subject to repair or replacement cannot be deemed a component part of the cost of repair or replacement.”
Also, in Smither v. Progressive County Mut. Ins. Co., 76 S.W.3d 719 (Tex. App. - Houston [14th Dist.] 2002), the Court refused to allow recovery of diminution of value. In American Manufacturers Mut. Ins. Co. v. Schaefer, 124 S.W.3d 154 (Tex. 2003), the Texas Supreme Court held that: “The actual market value of the vehicle before injury may be considerably less than the cost of repairs plus the loss of market value; or the actual market value may be more than the cost of repairs plus the loss of market value.”
The Supreme Court refused to rewrite the insurance contract and held: “AMM elected to repair the damaged vehicle and Schaefer does not contend that the repairs were faulty, incomplete or inadequate. If he did, then the insurer might be liable for breaching its obligations under the policy’s terms. But Schaefer would still only be entitled to the remedies outlined in the policy, which do not include compensation for a fully repaired vehicle’s diminished market value. We acknowledge that Schaefer’s repaired vehicle may command a smaller sum in the market than a like vehicle that has never been damaged, and that awarding Schaefer diminished value in addition to repair would go further to make him whole. But we may neither rewrite the parties’ contract nor add to its language. See Royal Indemnity Co. v. Marshall, 388 S.W.2d 176, 181 (Tex. 1965).”
The Texas Department of Insurance Bulletin B-0027-00 (2000) states: “The position of the Department is that an insurer is not obligated to pay a first party claimant for diminished value when an automobile is completely repaired to its pre-damage condition. The language of the insurance policy does not require payment for, or refer to, diminished value.”

http://www.mwl-law.com/wp-content/uploads/2013/03/diminution-of-value-in-all-50-states.pdf

 

[Nooner]

FYI - not every state recognizes the concept of dimunition of value:

Yes - those apply to a 1st party claim, not a 3rd party claim.

If the accident was my fault I'd be up a creek, but I was hit by a drunk driver.

 

[Don in Lodi]

It does say though, if it's not in the contract with the insurer, it can't be written in.

 

[Nooner]

“The position of the Department is that an insurer is not obligated to pay a first party claimant for diminished value when an automobile is completely repaired to its pre-damage condition. The language of the insurance policy does not require payment for, or refer to, diminished value.”

::009::

First Party Claim - Me against my insurance

Third Party Claim - Me against the other driver's insurance

This is NOT a first party claim. I was hit by a drunk driver. Superior riding skills, a basic grasp of physics and a whole lot of good fortune kept me from tumbling and laying down the bike. There was a lot of damage adn the frame is being replaced.

I know we are all armchair lawyers here, but ANY time you are in an accident and the other party is at fault you should pursue diminished value. DO NOT file a claim against your own insurance for diminshed value, you will not see a cent, DO file against the other party if they are at fault.

Back to the original issue here (and the one for while I am trying to gather data) - how much less woudl you expect to pay for a nearly new bike if you knew it was in a DWI accident and had to have it's frame replaced? In my reading of Harley forums it seems like 30-40% is the number... I would personally expect somethign in that range too, but Harleys are not ADventure bikes and there are more adventure riders here than in HD land.

 

[Ironhand]

Easy, Tex...you asked a question you now seem to know the answer to. Consider that some of us may actually be in the business you're talking about.

 

[Nooner]

Easy, Tex...you asked a question you now seem to know the answer to. Consider that some of us may actually be in the business you're talking about.

My question is what is the diminished value, not am I entitled to diminished value. If you are in the insurance industry you should well know the difference between a 3rd party claim and a 1st party claim and that if I was hit by a drunk driver my claim is 3rd party...

It seems like 30-40% is the number I should be targeting but I have no data to support that, and particularly none that pertains to ADventure bikes in general and the Super Tenere in particular.

How does your company calculate diminished value?

 

[Dallara]

~


Well, I imagine if you're ever planning on selling it here on the forum the value has diminished quite a bit now... ::025::

Sorry, but like Ironhand said, seems like you've asked a question but already have the answer you want. I spent over 40 years in the car and motorcycle sales, service, and parts business... dealing with insurance companies, lawyers, courts, manufacturers, customers, etc. about "diminished value" numerous times over the years... but I think I'll keep my input to your question to myself.

And given one of your previous posts it appears you've filed claims regarding "diminished value" before, right? Or what did you mean by "but ANY time you are in an accident and the other party is at fault you should pursue diminished value"?

Dallara




~

 

[TXTenere]

I *AM* in the industry, however, take this reply however you want ...

Diminished value is a whole lot less applicable to motorcycles than it is to cars, for the simple reason of motorcycles are (generally) repaired with factory new parts vs. fixing the parts that are installed on the car, or buying used parts for cars. That alone makes diminished value almost zero for motorcycles.

If the motorcycle is repaired with new parts, I'd say your diminished value is zero, or close to it. If the bike ended up with a salvage title, I agree, 30-50% of blue book is about right.