Much to the chagrin of insurers, I suspect, “diminished resale value” is mentioned in the definition for a “total loss” on the new National Motor Vehicle Title Information System website.
(NMVTIS is a DOJ program and DOJ is fully responsible for NMVTIS policy and operations)
The NMVTIS definition for a total loss is as follows:
Total Loss: The cost of repairing such vehicles plus projected supplements plus projected diminished resale value plus rental reimbursement expense exceeds the cost of buying the damaged motor vehicle at its pre-accident value, minus the proceeds of selling the damaged motor vehicle for salvage.
The DOJ’s website http://www.nmvtis.gov/ was created with the goal being that “junk,” “salvage,” and “flood” cars bearing branded titles could be bought and sold on the market with full disclosure. Consumers, states and other interested parties could freely access adverse title and odometer information, crooks would be hampered and crime would slow.
But it has taken nearly a decade to get the data flowing - state departments of insurance complain that the required reporting is burdensome, duplicative and unnecessary.
According to the NMVTIS, 27 states currently participate by contributing data to the project, and 10 additional states are working towards participation. All states are required to be fully participating on or before January 1, 2010.
Information being collected for the NMVTIS project includes the following:
Diminished value court expert, David Williams says, “The reason insurers have resisted the NMVTIS isn’t because the reporting requirements are burdensome as they claim. Insurers know the price of salvage cars will plummet when cars are sold with full disclosure and they want to keep resale value as high as possible on salvage to offset claims losses. They don’t want titles branded.”
Williams says it wasn’t long ago that State Farm admitted to not filing for salvage titles as state laws required them to in every case when cars were totaled. State Farm reportedly paid pennies on the dollar to settle these claims with state’s attorneys general in a collective agreement saving the insurer millions it would otherwise have had to pay out.
“While insurers continue to claim that diminished value doesn’t exist, the government acknowledges it and considers it a factor in determining when a vehicle is totaled,” says Williams. “It’s time insusrers did the same when paying claims.”
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