If you are unfortunate enough to be involved in a car accident, you expect that your collision coverage will pay for the damages. You will still be responsible for paying your deductible, and you expect that your insurance company will restore your vehicle to the condition it was in before the accident.
What you may not realize is that once your car has been involved in an accident, its cash value has gone down. If you decided to sell your car after the collision, you would not be able to get the same amount of money for it as an accident-free owner – even if the make and model are identical.
The insurance company is supposed to bring your car back to the state it was in before the loss occurred – to make you “whole” again. Unfortunately, the policy language may not specifically state that an owner will be compensated for diminished value of his or her vehicle following an accident. The insurance company may contend that it is not responsible for this cost, since it is not covered in the contract.
When you are buying car insurance, read through your policy terms carefully. Many insurance companies will not include diminished value as part of the protection they offer when a customer pays his or her premium. Consumers need to make an educated decision when they buy a product, and Tennessee car insurance coverage is no different.