Diminished Value Report

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DIMINISHED VALUE REPORT

(IACP Certified Appraisal)

Vehicle Owner: Insert Here Claim# Insert Here Vehicle Year and Make: Insert Here Vehicle Model: Insert Here VIN#: Insert Here Mileage: Insert Here

This report is to determine the diminished value, if any, to the Insert Year, Make & Model Here referenced above. The repairs performed on this vehicle are up to body shop industry standards. However, this vehicle has suffered a loss in market value as a result of the accident that took place on or around Insert Month & Year of Date of Loss Here.

This report, therefore, is to determine the amount of market related diminished value referenced vehicle has suffered. The Insert Year, Make & Model Here referenced above now has a recorded “accident history” with major damage. The “accident history” associated with this vehicle does, without question, devalue the vehicle. The disclosure laws in the State of Texas make it mandatory that previous damage be disclosed, (made known), to a prospective buyer. A prospective buyer wouldn't be willing to pay as much for a vehicle that was damaged as he would for one that had never been damaged. The difference in the amount he would be willing to pay for an undamaged automobile versus the price he would be willing to pay for one that has been repaired would be considered "Diminished Value".

The Law… Due to the negligence of another party, your vehicle has lost market value. A tort has been committed against you and you are due compensation for all damages suffered.

The State Bar of Texas Pattern Jury Charges, General Negligence 11.3, states … Consider the difference, if any, in the market value in ______County Texas, of the vehicle in question immediately before the occurrence in question and immediately after the necessary repairs were made to the vehicle. “Market value” means the amount that would be paid in cash by a willing buyer who desires to but is not required to buy, to a willing seller who desires to sell, but is under no necessity of selling.

The Texas Department of Insurance has issued a bulletin on this matter. The Texas Department of Insurance bulletin# B-0027-00 states; …“An insurer also may be obligated to pay a third party claimant for any loss of market value of the claimant’s automobile, regardless of the completeness of the repair, in a liability claim that the third party claimant may have against a policyholder. Further, an insurer may be obligated to pay a first party claimant under the Uninsured/underinsured motorist coverage provisions of the policy, for any loss of market value of the first party claimant’s automobile, regardless of the completeness of the repair”.

The Appraisal Methodology…

There are several factors which affect the amount of Diminished Value, including but not limited to: the year, make and model, mileage, the overall condition of the vehicle prior to the loss, the amount of damage, the type of damage, the extent of the damage, and the damage area.

The valuation process is broken down into two parts. The first part is an industry recognized mathematical formula that breaks down the necessary repairs. These repair operations are weighted proportionally with respect to the degree by which they would affect the vehicles' integrity. The formula applies different weights to different repair procedures on your particular year, make and model vehicle. For example, structural body pulls would be weighted more heavily than would welded replacement panels, which would be weighted more heavily than non-structural body repairs, and so on. Dozens of such factors are considered and numerous calculations made to arrive at a base value. This number is then adjusted by a matrix modifier that takes into account the retail value and mileage of the vehicle. This breakdown is needed because different repair procedures affect the loss of value to your automobile in different ways.

The second part is an average of retail quotes from a number of dealers in the area that deal with car valuations on a daily basis.

It is our objective to render a non-biased opinion pertaining to the loss of value suffered without the vehicle actually being sold. We take a common sense approach by analyzing the required repairs to determine what is different about the vehicle than prior to sustaining collision damage. We feel our method to be a fair, objective and non-biased means of calculating this type of loss. Our report addresses the extent of damage and places emphasis upon the nature of the damage. This is essential for measuring the degree to which the integrity of the vehicle has been compromised.

Why Contact Dealers?

The answer is obvious. Dealers make up nearly 90% of the used car market on average. This report is to determine the market loss of value your vehicle sustained as a result of this accident. The definition of market is “the business of buying and selling a specified commodity.” If no dealers were contacted then nearly 90% of the market would be left out. Before you had this accident you had access to this market. If the Insurance Company refuses to acknowledge dealer numbers then they are telling you that you no longer have access to nearly 90% of the market in a market related diminished value claim!

The following is a breakdown of the comparable vehicles for sale in the surrounding area:

Number of Comparable Vehicles Found--- 3 (date of loss in Month of Date of Loss here of Year of Date of Loss)

Dealer Vehicles--- 3 Percentage of Market--- 100

Private Vehicles--- 0 Percentage of Market--- 0 DIMINISHED VALUE REPORT

The following breakdown lists damages and the loss of value stated vehicle sustained as a result of this accident.

Vehicle: Insert Year, Make & Model Here Mileage: Insert Here Trans: Insert Here Pre-Loss Condition: Insert Here Prior damage history: Insert Here

Approximate value of vehicle immediately prior to occurrence: Insert Here

Part 1 DAMAGE INFORMATION (Formula Input): Impact Area: Insert Here Repair Cost: $0.00 Mech/Elect Labor: $0.00 Unibody/Frame Labor: $0.00 Structural Labor: $0.00 New Parts Replacement: $0.00 Used Parts Replacement: $0.00 Aftermarket Parts Replacement: $0.00 Body Labor: $0.00 Body Repair Labor: $0.00 Paint Labor: $0.00

FORMULA RESULTS (Formula Output): Impact Area: Insert Here Repair Cost: $0.00 Mech/Elect Labor: $0.00 Unibody/Frame Labor: $0.00 Structural Labor: $0.00 New Parts Replacement: $0.00 Used Parts Replacement: $0.00 Aftermarket Parts Replacement: $0.00 Body Labor: $0.00 Body Repair Labor: $0.00 Paint Labor: $0.00 Total for part one: Insert Total Here

Notes: Insert Notes Here

***This vehicle could not be certified as a direct result of this accident. ***The following features reflect most automotive manufacturer's Certified Pre-Owned programs. (Source; Kelly Blue Book)

• Vehicles that are under 5 years • Have mileage limits of fewer than 100,000 • Only vehicles that have had no major bodywork from prior accidents • "Refurbishment" of the vehicle after a multi-step inspection (75 to 305 inspection points) • Provides an extended warranty

Part 2

In addition to the Formula Based Diminished Value, Insert Your Company Name Here has conducted a market research by contacting a number of dealers in your area that have given an estimate of the loss of value your vehicle has suffered as a result of your accident.

The dealers agree on the approximate pre-accident market value before giving post repair retail quotes.

*The dealers contacted include but are not limited to: 1) Insert Dealership Name Here - ($0.00) 2) Insert Dealership Name Here - ($0.00) 3) Insert Dealership Name Here - ($0.00)

The breakdown is as follows: Approximate value of vehicle immediately prior to occurrence: Insert Here Repair Costs: Insert Here Dealer Consensus on retail Market Value immediately following repairs: Insert Here

Total Diminished Value for part two: Insert Here

Total Diminished Value of your vehicle: (Average of Formula and Market Quotes):

Formula---$0.00 Market Quotes---$0.00

$ 0.00 (0% of ACV)

Loss of Market Value Incurred DIMINISHED VALUE REPORT

Expert Opinion (See credentials on page 8) The Automotive Service Association (ASA), an auto industry group, contends that "your vehicle can and should be restored to pre-accident condition." The ASA outlines several steps repair facilities should take to ensure a "proper" and "quality" repair of your vehicle: Repairers should use the best refinishing and paint products and specialists; repairers should use only highly skilled welders who do repairs in accordance with the vehicle manufacturers' recommended procedures; and repairers should be able to pinpoint all damage. In short, the ASA contends the "repair should be a comprehensive reconditioning to original specifications."

Damage Categories

Frame and Structural--- There is more weight put on this category than any other. There is no greater factor in the Diminished Value of a vehicle than frame damage or structural damage. Consumers would be much less willing to buy a car that has frame damage or structural damage than they would a similar one with no frame or structural damage. If they were to buy the car with frame or structural damage, they would require a substantial discount.

Used Parts Replacement---Used parts usually have some type of damage or rust on them when they arrive at the body shop. When a prospective buyer of your vehicle knows that used parts were used in the repairs of your vehicle, they would not pay as much for it as they would for a similar vehicle that had never been in an accident.

Aftermarket Parts Replacement--- If the Insurance Company uses aftermarket parts on your vehicle; it obviously will diminish the value to a prospective buyer. Aftermarket parts are lower quality parts not made at the factory where your car was built.

New Parts Replacement--- Most newer model vehicles now have the VIN stamped on every piece of sheet metal. When a new part is ordered from the factory, it does not have the VIN stamped on the part. The prospective buyer of your automobile would likely pay more for a vehicle that has the original part and the original paint. (See “Expert Opinion” above).

Paint Labor-- The paint equipment at even the best body shops is not of the same quality as the factory paint equipment. (See “Expert Opinion” above 2) Paint depth and quality are less from a body shop painted panel. The prospective buyer will not be willing to pay as much for a vehicle when one or two parts have been re-painted and the other parts still have the factory paint.

Mechanical/Electrical---If the mechanical and or electrical components of a vehicle have been damaged and repaired, the prospective buyer will be afraid there may be problems in the future. The buyer would obviously be willing to pay more for a similar vehicle with no history of mechanical or electrical damage.

Body Labor--- Although the body repair men may be excellent at what they do, they cannot duplicate the quality of work that the equipment at a manufacturing plant performs. (See “Expert Opinion” above). Knowing that parts were not put on at a factory but by a body repair man at a body shop will likely lower the value of the vehicle on the market. Body Repair Labor--- Filler material on panels is a huge deterrent to prospective buyers. The quality of a part with filler material on it is much lower and the prospective buyer will not pay as much for a car that has parts with filler material if a similar car has not been in an accident and has no filler material.

The Law Regarding Diminished Value

Some Insurance Companies around the country still try to dispute payment of Diminished Value in Texas to third party claimants or first party claimants under the uninsured/underinsured motorist section of the policy.

Below is a portion of the Texas Pattern Jury Charges, General Negligence and Intentional Personal Torts (11.3), from the State Bar of Texas and a Bulletin from the Texas Department of Insurance.

PJC 11.3 c. Difference in market value.

Consider the difference, if any, in the market value in Harris County, Texas, of the vehicle in question immediately before the occurrence in question and immediately after the necessary repairs were made to the vehicle.

“Market value” means the amount that would be paid in cash by a willing buyer who desires to buy, but is not required to buy, to a willing seller who desires to sell, but is under no necessity of selling.

COMMISSIONER´S BULLETIN NO. B-0027-00

April 6, 2000

TO: ALL COMPANIES, CORPORATIONS, EXCHANGES, MUTUALS, RECIPROCALS, ASSOCIATIONS, LLOYDS, OR OTHER INSURERS WRITING PROPERTY AND CASUALTY INSURANCE IN THE STATE OF TEXAS AND TO OTHER AGENTS AND REPRESENTATIVES AND THE PUBLIC GENERALLY. ……An insurer also may be obligated to pay a third party claimant for any loss of market value of the claimant’s automobile, regardless of the completeness of the repair, in a liability claim that the third party claimant may have against a policyholder. Further, an insurer may be obligated to pay a first party claimant under the uninsured/underinsured motorist coverage provisions of the policy, for any loss of market value of the first party claimant’s automobile, regardless of the completeness of the repair.

Sincerely,

David Durden

Associate Commissioner

Property & Casualty Program, MC104-5A DIMINISHED VALUE REPORT

Insert Your Company Name Here Credentials

Certified by The Bureau of Certified Auto Appraisers (IACP Certification# Insert Your IACP Certification No. Here) www.bocaa.org

The staff at Insert Your Company Name Here has over 0 years of experience in the Automobile Appraisal, Automobile Dealer and Insurance Adjusting Practices.

Our Group and Consultants include: National Automobile Dealer Association Members, ICAR certified body repair men, Licensed Adjusters Appraisers, Industry Qualified Appraisers and Certified Inspectors.

Combined, we have performed thousands of diminished value assessments that have helped automobile owners collect for the loss of value their vehicle suffered.

I certify that, to the best of my knowledge and belief:

 The statements of fact contained in this report are true and correct.  The reported analyses, opinions, and conclusions are limited only by the reported assumptions and limiting conditions and is my personal, impartial, and unbiased professional analyses, opinions, and conclusions.  I have no present or prospective interest in the property that is the subject of this report and no personal interest with respect to the parties involved.  I have no bias with respect to the property that is the subject of this report or to the parties involved with this assignment.  My engagement in this assignment was not contingent upon developing or reporting predetermined results.  My compensation for completing this assignment is not contingent upon the development or reporting of a predetermined value or direction in value that favors the cause of the client, the amount of the value opinion, the attainment of a stipulated result, or the occurrence of a subsequent event directly related to the intended use of this appraisal.  My analyses, opinions, and conclusions were developed, and this report has been prepared, in conformity with the Uniform Standards of Professional Appraisal Practice.  I have personally inspected the information that is the subject of this report.  The appraiser herein, by reason of this appraisal is not required to give testimony or attend court or any governmental hearing with reference to the property in question without prior agreement as to fee for additional services desired.

Insert Your Company Name Here valuations are based on estimate and vehicle information believed to be authentic, reliable and accurate. Insert Your Company Name Here has used reasonable care in producing the valuations offered, however, Insert Your Company Name Here makes no guarantees, expressed or implied, as to the final resolution of your claim and shall not be liable for any differences or damages of any type or description incurred by the use of the information. This report prepared by Insert Your Name Here

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