Forum: Cover not-at-fault car owners for reduction in vehicle’s market value after accident
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In Singapore, car ownership is expensive due to the high cost of the certificate of entitlement (COE) and taxes, which can make vehicles a significant financial investment.
Diminished value compensation could be a valuable addition to car insurance, helping owners recover the loss in market value after an accident. This type of compensation aims to make up for the depreciation in a vehicle’s resale value due to an accident, which may not be fully covered by regular insurance policies.
A diminished value claim is usually filed after the car has been repaired. Typically, the claim is made against the insurance of the at-fault party. If the at-fault party’s insurance doesn’t cover diminished value claims, the car owner may be able to file through the legal system or insurance regulations.
The calculation of diminished value depends on the car’s book value and can range from 10 per cent to 20 per cent depending on the extent of the damage.
Diminished value compensation, available in some countries, is typically available to those who were not at fault for the accident. This helps to protect their financial investment, especially in countries with high vehicle costs like Singapore.
Having access to diminished value compensation will offer owners some financial relief.
Kim Chuin Ming
