Read Part 1.
III. Diminution in Value – The Law of Property Damage
The law relating to property damage claims is technical. Many people believe that they should receive the amount of money they will need to replace their damaged property. Unfortunately, that is not the law. Instead, the bicyclist is entitled to the amount of money equal to the difference between the fair market value of the property immediately before, and immediately after, the occurrence. This is called the “diminution in property value”. Bicycles depreciate rapidly and often the market value of a used bicycle is considerably less than its original purchase price. In order to establish market value, it is best to take your bicycle to a bike shop and get the following estimates:
● Value of the bicycle in the condition it was in immediately before the accident. In other words, the appraisal should be of the same year and model as your bicycle in the same condition. Most bike shops only sell new bikes. If you are having trouble, call around and find the name of a bike shop that sells used bicycles or will help you with your brand.
● Cost of repair of the bicycle. Do this even if you are certain the bicycle is beyond repair.
● Value of the bicycle in the condition it was in immediately after the accident. This amount is usually very low; what market value is there for a bent bike? The claims adjuster will almost certainly call the shop to verify your figures. If your bike is “totaled” the adjuster will want to pay the value of your bicycle before the accident minus its salvage value.
Frequently, bicycles have little or no salvage value. If you have a particular attachment to some of the components, such as that Terry saddle or that wonderful old Campagnolo crankset, let the adjuster know and they will frequently be willing to let you have these parts. It has been my experience that the adjuster will usually recognize that a bike has no salvage value and allow you to keep the damaged bike if it is indeed totaled. On the other hand, if the bicycle can be fixed, it is up to you whether you want to fix the bike or not. You are not entitled to receive more money because your bicycle had a particularly high sentimental value. However, if your bicycle was a rare bicycle, and had an unusually high monetary value, you are entitled to receive that greater value if it is damaged or destroyed.
Remember, the diminution in value of the bicycle may be much less than it would actually take to fix the bike. The law states that the person responsible for the damage need only pay the loss in value, not the cost of repair.
IV. The Statute of Limitations
The Oregon statute of limitations for property damage claims caused by negligence is two years unless the defendant is an agent for a public entity, in which case written notice of a claim must be provided to the appropriate authority within 180 days after the accident. In serious injury cases, it can be a year or more before the person has recovered enough to know what if any permanent physical impairments may have resulted; however, property damage claims can be resolved immediately after the collision. There is no tactical reason to wait to resolve the property damage claim, and if a bicyclist also suffered physical injuries any release of claims signed by the rider can be limited to property damage only so that the personal injuries may be pursued at a later time within the statute of limitations.
This article will be concluded in later posts.
Ray Thomas is a founding partner at Swanson, Thomas, Coon & Newton where he represents bicyclists and pedestrians injured in collisions.