Court Rules That A Vehicle Does Not Have To Be Sold To Make Out A Claim For Accelerated Depreciation

In an ICBC claim, when you have a vehicle that has been damaged in a motor vehicle accident, the resale value of this vehicle will be lower, even if it has been repaired. This loss is recognized at law, and is known as a claim for accelerated depreciation. This ICBC claim usually applies to more expensive cars that are in excellent condition, but can apply to others as well. In reality, if a buyer is faced with two identical cars in terms of make, model, year, and mileage, but one has been in an accident, and the other not, then preference will be given to the car that was not in the accident. The law in British Columbia states that you must declare any damages over $2000 if you intend to sell your vehicle.

 

ICBC is loathe to pay such a claim and, when they do, they will not separately recognize the claim, but rather will roll an amount for the claim into an overall global settlement number. The main reason ICBC will try to avoid paying is the proverbial floodgates argument. If it gets out that they are paying out on accelerated depreciation claims, then their fear is that there will be an onslaught of claims for accelerated depreciation, potentially costing ICBC untold millions of dollars.

 

There is a common misconception that you must be in the process of selling your vehicle at the time of the motor vehicle accident in order to be able to make a claim for accelerated depreciation. This is simply not the case. The claim for accelerated depreciation arises on the day of the accident.

 

Another misconception that arises is that you have to sell your vehicle in order to realize a claim for accelerated depreciation. This is also not true, as you can still keep your vehicle after making a claim for accelerated depreciation.

 

If you have been involved in a motor vehicle accident, and wish to bring an ICBC claim for damages, it is always prudent to make sure that you bring a claim for accelerated depreciation, if the circumstances warrant it. You could be losing out on several thousands of dollars if you do not. You are wise to obtain an expert report from someone who can view and test drive your vehicle, and then present this expert report to ICBC.

 

In Cummings v 565204 B.C. Ltd., the cost to repair a used vehicle was just over $13,000, and the Court awarded the Plaintiff $7,600 for accelerated depreciation.

 

[70] Ms. Cummings is claiming the amount of $7,600 for accelerated depreciation of the Nissan due to the damage it sustained in the accident. For the following reasons, I have concluded that an award in that amount for accelerated depreciation is appropriate.

 

[71] The cost to repair the Nissan following the June 2006 motor vehicle accident was in excess of $13,000. Ms. Cummings tried to trade the Nissan in following the accident but was told by Dean Dodd, the lease manager at the Richmond Honda dealership, that the dealership is not interested in a vehicle that had sustained more than $5,000 in damage in an accident. Mr. Dodd confirmed that the dealership does not accept cars for trade that have in excess of $4,000 damage.

 

[72] Mr. Haffenden testified that the owner of a vehicle that has been involved in an accident where the damages exceed $2,000 must declare the damages, whether selling privately or to a dealer. In his opinion, the Nissan would have suffered a depreciation of approximately 20% or $7,600 on the date of the accident as a result of the damage it sustained.

 

[73] It is not necessary for a plaintiff to sell a vehicle in order to make out a claim for accelerated depreciation. The assessment of a claim for accelerated depreciation should be made on the day of the accident: Reinders v. Wilkinson (1994), 51 B.C.A.C. 230.

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