Can the insurer deduct for any damage or rust to my car that existed before the loss?
Yes. However, deductions for previous damage or prior condition must be itemized with a specific dollar amount and are limited to the amount by which the resale value of the car is increased by the elimination of the previous damage or the correction of the prior condition. In other words, if your car was damaged in a previous accident and you decided not to get it repaired, or if you neglected the condition of your car which resulted in the vehicle sustaining rust, your car would not be worth as much on the open market if you tried to sell it than it would be had you elected to repair the previous damage or maintain the car in good condition. The amount by which the resale value of your car increases by eliminating the previous damage, or correcting the prior condition, is the amount the insurance company can deduct from your total loss settlement. As New Jersey does not have a law which specifies just how insurers can take deductions for previous damage or prior condition, the exampl
