Diminished value claims in Washington

Who can claim diminished value in Washington

• Third-party claim: if the other driver caused the crash, the drop in your car's market value after repair is part of the property damage owed by that driver's liability insurer.
• First-party claim: Washington is one of the few states where a court has read an auto policy to cover diminished value. Moeller turned on the wording of the Farmers policy, so whether your own collision coverage pays depends on your policy's language. Read the coverage grant and the limit-of-liability section.
• Partly at fault? Washington still lets you recover, minus your share. That makes a Washington claim worth pursuing even when liability is split.

Washington deadline: 3 years (RCW 4.16.080(2))

Three years for an action for taking, detaining or injuring personal property. A claim under your own policy may also be limited by a suit-limitation clause in the policy, so check it. Start the insurance claim once repairs are finished rather than waiting on the deadline.

Fault: RCW 4.22.005

Pure comparative fault: your own fault reduces the award in proportion but does not bar recovery.

How Washington law treats diminished value

Moeller v. Farmers Insurance Co. of Washington, 173 Wn.2d 264, 267 P.3d 998, decided December 22, 2011, is the leading Washington case. It was a class action by policyholders whose repaired cars were worth less than before the crash. The court, 5 to 4, held that the Farmers policy provided coverage for the diminished value of a post-accident, repaired car and that the class was properly certified.

The reasoning matters for your claim. The majority read the policy's promise to repair or replace with property of like kind and quality as reaching value, not just function, because an average policyholder would expect a repair to put the car back where it was. Policies written after Moeller may use different words, so the outcome depends on the form you hold.

For a third-party claim, the insurer will still want proof. Bring the repair invoice and supplements, photos of structural or frame work, the history report showing the accident, and comparable listings from your region. Seattle, Spokane and the Tri-Cities markets can price an accident-history car differently.

How insurers value a totaled car in Washington

Washington regulates total-loss settlements closely in WAC 284-30-391. The insurer must base actual cash value on comparable vehicles that are currently available, or were available within 90 calendar days of the date of loss, and must account for options, mileage and condition when deciding what is comparable.

The settlement must include all applicable taxes and fees you would have paid buying the car just before the loss. Any additions to or deductions from actual cash value must be explained to you and itemized with specific dollar amounts. Ask for the report and check every line.

If you cannot buy a comparable car for the amount paid, WAC 284-30-391 also has a procedure for reopening the claim. Act quickly and keep a record of the dealers and listings you checked.

The appraisal clause in Washington

Most Washington auto policies include an appraisal clause for disagreements over the amount of a covered physical-damage loss. Each side hires an appraiser, the appraisers name an umpire if they cannot agree, and a written award signed by two of the three sets the amount. Coverage questions stay outside appraisal.

If your own Washington policy does cover diminished value, a dispute over the amount may fall within the appraisal clause; read the clause to see what it reaches. Against the other driver's insurer, your appraisal clause does not apply.

What else matters in Washington

• The Washington State Office of the Insurance Commissioner enforces WAC 284-30-391 and takes complaints about claim handling.
• Washington small claims court hears claims of up to $10,000 brought by a natural person (RCW 12.40.010), which covers many diminished-value disputes.
• Wet-weather and mountain-pass crashes often involve suspension, wheel and frame work. Keep the alignment printouts and frame measurements from the shop; they show the depth of damage a buyer will see.