Statutory Diminution of Value Claims

There is an alternate method for handling your diminished value claim that became effective on January 1, 2010. Below is an outline of North Carolina General Statute 20-279.21(d)(1), which sets out the new option. If the insurance company has not obtained an appraisal, this approach will compel them to get an appraisal.

  • Step 1 — First, you and the insurance company must be unable to agree on the difference between the fair market value of your auto immediately before your accident and immediately after your accident.
  • Step 2 — The difference between your opinion and the insurance company’s opinion of the value of your claim must be greater than the lesser of $2,000.00 or 25 percent of the fair market value (as determined by www.NADA.com) of your car.
  • Step 3 — You must send a written demand to the insurance company to select a competent and disinterested appraiser.
  • Step 4 — Both you and the insurance company must select a competent and disinterested appraiser (you each pay for your own appraiser) within twenty days after your demand, and each of you must notify the other of your selection.
  • Step 5 — The appraisers must independently appraise the loss. If the appraisers disagree on the fair market value of your auto immediately before your accident and immediately after your accident, then the appraisers must select a competent and disinterested third appraiser to serve as an umpire. The cost of the third appraisal will be shared by you and the insurance company.
  • Step 6 — If the appraisers are unable to agree on this third competent and disinterested appraiser, then you or the insurance company may request that a magistrate select the umpire. The deciding magistrate must be a resident in the county where (a) the accident occurred or (b) the insurance company’s policyholder’s vehicle is registered.
  • Step 7 — The appraisers must submit their appraisals and value evidence to the umpire, and the umpire must prepare a report determining the amount of your loss and provide the report to you and the insurance company. In deciding the loss and preparing the report, the umpire shall make no determination of liability and must award damages that are in between the determinations of the two primary appraisals.
  • Step 8 — You and the insurance company have fifteen days from the filing of the umpire’s report to notify the other party of your rejection of the umpire’s determination. If you or the insurance company fails to reject the umpire’s determination within fifteen days, then the umpire’s determination and report are binding upon both you and the insurance company. If a challenge is timely made, the diminution of value claim must be then be litigated to conclusion.
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