by tcope » Fri Mar 23, 2007 01:21 pm
Hard to pick the correct group for this post, so feel free to move it.
Insurance companies do not want diminishment of value to become a valid part of automobile property damage claims. It cost them money. Diminishment of value is the _perception_ of the person/public that a vehicle's value is reduced once it's been damaged _and_ repaired. That is, that the _repair itself_ somehow caused the vehicle to be worth less then a vehicle that has not been repaired. Again, diminishment of value is bases solely on _perception_. I'm not saying that it's not valid, it is... but only because or if this is what most people _believe_.
So were would most people obtain this belief from? I think pretty much everyone would cite companies such as Carfax (Carfax being the largest and most well known by far). So, where does Carfax obtain it's information that a vehicle has been in an accident? Well, Carfax is not very clear on this information... they don't mention it at all on their own website, but one place is ISO's Index system. Almost all insurance companies use this system to report certain information about accidents. What accounts for a vast majority of entries are injury claims (slip and falls, injuries in automobile accidents, etc) but some carriers (USAA, Progressive, GEICO and a few others) have a system to automatically report all claims entered into their system... even towing claims. This means those insurance companies are reporting property damage about these vehicles, which Carfax can then access and report to other people. To tie this all together, it's these Carfax reports that indicate to people that a vehicle is worth less once it's been damaged in an accident. As mentioned above, this then indicates to the public that diminishment of value should be valid. So, by reporting damaged vehicles, an insurance company will probably end up increasing the amount they pay out on automobile claims.
Just food for thought.
Insurance companies do not want diminishment of value to become a valid part of automobile property damage claims. It cost them money. Diminishment of value is the _perception_ of the person/public that a vehicle's value is reduced once it's been damaged _and_ repaired. That is, that the _repair itself_ somehow caused the vehicle to be worth less then a vehicle that has not been repaired. Again, diminishment of value is bases solely on _perception_. I'm not saying that it's not valid, it is... but only because or if this is what most people _believe_.
So were would most people obtain this belief from? I think pretty much everyone would cite companies such as Carfax (Carfax being the largest and most well known by far). So, where does Carfax obtain it's information that a vehicle has been in an accident? Well, Carfax is not very clear on this information... they don't mention it at all on their own website, but one place is ISO's Index system. Almost all insurance companies use this system to report certain information about accidents. What accounts for a vast majority of entries are injury claims (slip and falls, injuries in automobile accidents, etc) but some carriers (USAA, Progressive, GEICO and a few others) have a system to automatically report all claims entered into their system... even towing claims. This means those insurance companies are reporting property damage about these vehicles, which Carfax can then access and report to other people. To tie this all together, it's these Carfax reports that indicate to people that a vehicle is worth less once it's been damaged in an accident. As mentioned above, this then indicates to the public that diminishment of value should be valid. So, by reporting damaged vehicles, an insurance company will probably end up increasing the amount they pay out on automobile claims.
Just food for thought.
Posted: Fri Dec 21, 2007 03:50 pm Post Subject:
thank you for an informative post tscope
Posted: Sat Jan 19, 2008 07:58 pm Post Subject:
dreamer, dreamer, where are you dreamer?
Posted: Sat Jan 19, 2008 10:08 pm Post Subject:
When a vehicle is repaired it is supposed to be repaired to what it was prior to the accident right? So why would it diminish the value. I could see where a carfax report would freak people out and make them make a decision not to purchase a vehicle if it had been in flood water or some other damage like that. I think that if you stick with the same dealership you can build trust enough that they would not purchase these types of vehicles that are going to cost you tons for damage to the electrical system or something like that. I think it is good to have the carfax reports but it should also have something that states that the vehicle has been repaired and inspected to a good standing. just my opinion.
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