What Is Diminished Value?
Even after high-quality repairs, your vehicle can lose significant market value simply because it has an accident history on its record.
Understanding Diminished Value
Diminished value is the reduction in a vehicle's market worth that results from an accident, even if it has been fully repaired and returned to excellent condition. Buyers are often wary of vehicles with accident histories, which drives down resale prices.
The Three Types of Diminished Value
- Inherent Diminished Value — The most common type. The vehicle is worth less simply because it was in an accident.
- Repair-Related Diminished Value — Value loss due to improper or incomplete repairs (e.g., using aftermarket parts instead of OEM).
- Immediate Diminished Value — The drop in value right after the accident, before repairs are completed.
How Diminished Value Claims Work
Most states allow you to pursue diminished value from the at-fault driver’s insurance company. The process typically involves:
- Documenting the pre-accident condition and value of your vehicle.
- Obtaining a professional diminished value appraisal.
- Submitting a detailed claim package to the insurance company.
- Negotiating or escalating if the insurer offers a lowball amount.
Insurance companies often undervalue or deny these claims. Having an experienced advocate who understands how carriers evaluate these claims can make a significant difference in your recovery.