RANDOLPH, New Jersey (WABC) --Just two words - "diminished value." But when put together, and stated to a car insurance company, those words could get you paid hundreds or even thousands more on an accident claim.
Most car owners and even some of the most seasoned insurance brokers have little or no idea what it is or how to file.
"I go to sell my car now I'm going to be out a lot of money," says Randolph resident, Merri Millman.
More than $4,000 to be exact, all because another driver side-swiped Millman's parked car last March.
"He said 'is this your car?' and I said yes, and he said, 'well I just hit it,'" recalled Millman.
His insurance, Progressive, paid for the repairs to her car, fully fixing dents and scrapes along the side and bumper. The problem? Your car is ultimately repaired, but you still lose money. That's because a car's resale value takes a dent when it's hit.
It's a little-known insurance payout called 'diminished value.' It amounts to compensation for the loss of your car's re-sale value, after someone else hits it. Merri's husband received a $2,000 diminished value claim recently.
But when she asked Progressive Insurance to pay her cars diminished value? She says she was told Progressive "doesn't do that." But, that's wrong. Diminished value is allowed in New Jersey, New York and Connecticut.
So Merri's dealer gave her a letter - stating the car was worth 28 grand. But after the accident, only $23,000; a hit of more than $4,000.
She was even more shocked when Progressive denied her claim saying she didn't prove her car sustained any diminished value.
"I don't know what I need beyond a letter," said Millman.
And when she asked Progressive what else she should prove?
"He said if I tell you what I want, you will know what I want. You'll have to figure it out," said Millman.
"Insurance companies love collecting premiums and hate paying claims." Attorney Mitch Portnoi says he's recovered thousands in diminished value claims, but consumers leave thousands on the table everyday by not realizing how or whether they can fight for it.
"Her case in winnable with the appropriate evidence supplied," said Portnoi.
7 on your Side asked Progressive what specific proof it needed to prove diminished value but the insurance giant never gave us an answer.
The big takeaway is to first file your claim with the insurance company of the driver who hit you - not your insurer. And don't wait. File when you're filing for repair bill coverage.
You might want to ask for an expert's diminished value report. It costs about $200 to $400 - and sometimes gives you added muscle to get a settlement.
And you might consider hiring a lawyer who specializes in this,they often work on a contingency basis. So you don't pay unless you win a settlement.
Progressive corporate statement:
Repairs were made to Ms. Millman's vehicle, following the accident, by the Mercedes dealership of her choice. We believe these repairs restored her vehicle to its pre-loss condition and value. Unfortunately, the documentation provided thus far does not substantiate her claim of diminished value. As outlined within the letter we sent to Ms. Millman in February, if she has additional documentation that supports her claim, we ask that she forward it to us directly as we would be glad to review it.