Call Kurtis Investigates: 2 Words That Can Lead to Thousands of Dollars After a Car Crash

SACRAMENTO (CBS13) — Liz Teklinsky bought a brand new Hyundai Elantra. It's her first new car in 19 years.

"It had the new-car smell. It had the technology and heating seats," she said.

THE CRASH

A week later with fewer than 500 miles on the odometer, someone crashed into her car. The other driver's insurance company paid for the damage, but Liz now realized if she tried to sell her car, she wouldn't get as much for it.

Car appraiser Seth Stairs says even after repairing the damage, a car's value may drop after a crash. Someone may be less willing to buy your car than one never involved in an accident. He calls the difference "diminished value" and says you shouldn't expect insurance companies to tell you about it.

"This is the industry kept secret," Stairs said.

INDUSTRY KEPT SECRET

He says insurance companies are keeping billions of dollars nationally they should be paying out. He says your policy with your own insurance company most likely won't pay diminished value on your car. If the other driver is at fault, he says you should ask their insurance for the diminished value.

He says newer cars with structural damage usually have the biggest drop in value after a crash, while it may not affect the value of older cars at all.

Liz had never heard of diminished value before a friend told her about it.

"I mean the concept made sense as soon as I heard it," she said.

HOW MUCH LESS IS IT WORTH?

You may need to hire an appraiser which can cost you $350. Liz hired an appraiser who said her car lost $2,513 in value. When the other driver's insurance countered with one thousand dollars, she declined and took the case to small claims court where she was awarded just shy of $3,000 including money to cover the appraisal cost and court fees.

Justin Vosbein of Modesto got $1,050 after suing for diminished value when someone crashed into his Volkswagen.

"I don't know there's a lot of people willing to work for it. It is something you have to work for," he said.

LEGALLY, DO THEY HAVE TO PAY IT?

The Insurance Information Institute says, "Insurers pay to repair a car to the standard it was prior to the crash." It says insurers, "adjust claims to the letter of the law."

George and Washington have clear laws about the diminished value consumers are owed. California does not.

The Department of Insurance says California insurance code is silent on the issue of diminished value after a car crash and the agency can't go after an insurance company for refusing to pay it.

"Because our authority doesn't extend that far and the law doesn't require them to do so," said Nancy Kincaid with the Department of Insurance.

Stairs claims the most he's helped someone get is $9,000. Even he admits, some judges don't buy into diminished value.

"If you don't ask you won't get it," he said.

Liz is glad she did. With her diminished value check in the bank, it softens the blow of having her new car smashed up just one week after buying it.