Having your car damaged in a traffic accident is not a pleasant experience. Fortunately, if the damage is limited to property, compulsory motor third party liability insurance usually saves you from financial loss. However, according to lawyers, not everyone is aware that not only the cost of repairing the car, but also the loss of its market value, can be claimed from the insurance company.
According to Eimantas Čepas, an attorney with the law firm AVOCAD, the amount of damage to a car in a traffic accident is most often understood as the cost of repairs. “However, when buying or selling a car, significant attention is paid to whether the car has been involved in a traffic accident in the past and whether it has been repaired or not, and if the fact of the accident is confirmed, buyers seek to negotiate a lower price for the car,” the lawyer notes.
Therefore, according to Eimantas Čepas, we should not forget that there is another form of damage—the reduction in the car’s market value due to damage sustained in a traffic accident. “And this is not merely a matter of negotiation between the car seller and buyer, but a sum clearly determined according to criteria established by law,” the attorney emphasizes.
According to the legislation in force in Lithuania, loss in marketable value is defined as the irreversible reduction in the value of a vehicle due to repairs, painting or unrepaired damage (when parts of the vehicle are technologically repaired to restore their functional characteristics, where the technological process of repair may affect the physical, chemical, aesthetic condition or service life of the item), including the change in the vehicle's history as a result of an event, compared to the vehicle's value before the damage.
A decrease in market value, just like ordinary damages, must be covered by the at-fault party’s liability insurance. “Unfortunately, current legal regulations do not contain clear provisions stating that a person injured in a traffic accident has the right to claim compensation from the insurer for the aforementioned decrease in market value,” notes an AVOCAD attorney.
According to him, taking advantage of the lack of information, not all insurance companies offer to compensate the injured party for the decrease in the car’s market value resulting from repair work, in addition to the standard compensation for damages. “Even if compensation for the aforementioned decrease in value is offered, the proposed amount is not always calculated objectively. Therefore, even after receiving an offer from the insurer, it is advisable to obtain an independent appraiser’s report, as the amount compensating for the decrease in market value can be quite significant and amount to thousands of euros,” notes E. Čepas.
However, according to the lawyer, it should be noted that the loss of market value is calculated for vehicles that are no more than five years old from the date of first registration. “Since this compensation is calculated for relatively new cars—which also means cars of correspondingly higher value—the amount of compensation can often be quite significant,” the lawyer notes.
According to the current legal framework, the amount of damage caused to property in a traffic accident is determined by the responsible insurer on the basis of reports by authorised persons and property valuation reports, documents proving the circumstances, the fact and the amount of the damage, photographs and video recordings.
The Supreme Court of Lithuania emphasises the insurer's duty to assess all documents submitted to it and to evaluate all circumstances, including the documents submitted by the injured third party to prove the amount of the damage, in order to determine the amount of the damage in such a way that the injured party is fully compensated for the damage, to the extent permitted by the rules governing compulsory civil liability insurance.
The principle of full compensation requires that, as far as is objectively possible, the damage caused to a person should be determined on an individual rather than standardised basis.In the event of a dispute as to the amount of the insurance benefit between the person claiming the insurance benefit and the insurer who has insured the civil liability of the driver of the vehicle by compulsory insurance, the amount of the insurance benefit must be proved in each individual case.
To sum up, in order to ensure fair compensation after an accident, it is important not only to rely on the insurance company's offer, but also to be vigilant and proactive in defending your rights - not forgetting the possibility of claiming compensation for the loss of the car's marketable value, and, if necessary, to seek the advice of independent experts who can help you to assess the damage in an objective way and make sure that you receive the full amount of compensation you are entitled to.