A local business man says there’s a loophole that insurance companies don’t want drivers to catch on to – he says drivers may be entitled to extra cash related to the diminished value of a vehicle that’s been involved in a collision.

Diminished value is the reduced value of a vehicle that is damaged and repaired, the difference in what you could have sold your vehicle for, prior to a collision – versus the price after the crash and repairs.

Cindy Bennett was involved in a crash that caused more than $9,000 in damage to her BMW.

Bennett says although the body shop did a great job repairing the vehicle to its pre-collision state, prospective buyers didn’t see it that way.

“When I was trying to sell the vehicle through a dealer, is when they alerted me that it would not be worth nearly as much as if that vehicle was not in an accident,” Bennett said.

"They kept saying, reiterating, it doesn't matter that it has low kilometres, it's in perfect condition, the fact of the matter is you've lost value because of it (the collision)."

Bennett thinks that's unfair and that’s when she approached Ed Grieve with Diminished Value of Alberta.

"We can get an idea what the vehicle was worth before the accident, after the accident, and the diminished value that has occurred because of the accident,” Grieve said.

“That diminished value, which is claimable, you can bring that forward to the at-fault party and recoup that.”

The business man does $700 appraisals that he says can serve as proof of loss in court.

Grieve says anyone who was in a collision in Alberta in the past two years can sue either the at-fault driver or the insurance company – for diminished value.

He uses a formula that looks at the condition of the vehicle pre-collision and how much damage was done.

“It’s a formula that I’ve invented,” Grieve said.

“We went into court and was very stringently looked at by the judge and after going through everything he said, ‘you know Mr. Grieve you’ve come up with a very simple solution to a very difficult problem’ and it was recognized in court.”
 

‘He believes that he has found a loophole and that’s just not true’

Grieve says the company’s success rate is 100 per cent – based on two clients.

He says one client settled the dispute outside of court, while the other – in Sherwood Park – was awarded $17,000 for loss in value.

He says Albertans involved in accidents are entitled to the extra cash for diminished value, but insurance companies say otherwise.

“He believes that he has found a loophole and that’s just not true,” said Heather Mack with the Insurance Bureau of Canada.

“Some people are pumping this up, but no.”

The IBC says the Sherwood Park case was an exception – a rarity because there was very specific evidence.

“It doesn’t meant that diminished value, every Albertan who has a car accident, can go back to their insurer and get diminished value, that’s not true,” Mack said.

The IBC says there isn’t any wording in policies that mentions diminished value but Grieve’s argument is that diminished value should be paid since auto policies don’t specifically state that they aren’t.

Bennett understands the IBC’s position on the matter, but says she’s prepared to risk losing appraisal and court costs to fight this battle and she hopes her efforts will encourage others to do the same.

“Out of principal, I think there needs to be education around this. Where it ends up, if I win, that’s great, if I don’t, then maybe it’s the next person who takes it on but it definitely does exist,” she said.

“We give our money every month in insurance payments and when it comes to somebody representing us appropriately, all I’m saying is if somebody can make a stand and make a change.”

Bennett is scheduled to have her argument heard in court this summer.

Her claims have been proven.

With files from Laura Lowe