What Is a Diminished Value Claim?
Everything You Need to Know

On average, a vehicle can lose 15% to 25% of its value instantly after an accident, even if it’s been fully repaired.

This loss, known as diminished value, represents the difference between your car’s market value before the accident and its reduced value afterward. Many drivers don’t realize that they may be entitled to compensation for this financial loss.

Whether you plan to sell the car or keep it, the diminished value can significantly impact your finances. If you’ve been in a car accident, it’s important to understand your rights and consider pursuing compensation for this loss.

What Documents Do You Need?

To build a solid claim for diminished value, you’ll need to gather essential documents that will support your case.

Here’s a list of key items you’ll need:

• Pre-accident value documentation: This could include a Kelley Blue Book printout, which shows your car’s value before the accident.
• Repair estimates and invoices: Detailed records of the repairs done to your vehicle.
• Before-and-after photos: Clear images of your car before and after repairs.
• Vehicle history reports: A Carfax report can provide insight into the car’s history, including any previous accidents or damage.
• Professional appraisals: A certified auto appraiser can assess the diminished value of your vehicle post-accident.

Your lawyer, in collaboration with an auto appraiser, will help determine the pre-accident value of your car and how much its value has dropped. If you have a repair-related diminished value claim, a mechanic may be necessary to assess the repairs made and how they affected the vehicle’s worth.

Timeline of the Claims Process

The timeline for filing a diminished value claim can vary depending on the complexity of the case, but here's a general guide to what you can expect:

• Gather required documents (1-2 weeks): Collect all the necessary paperwork, including repair estimates, photos, and value documentation.
• Obtain a professional appraisal (3-5 days): Hire a certified auto appraiser to assess the value loss due to the accident.
• File the claim with your insurance company (1 day): Submit your claim, including all the gathered documentation.
• Insurance company review period (2-4 weeks): The insurer will evaluate your claim and the evidence presented.
• Negotiation with the insurance adjuster (1-3 weeks): You may negotiate to reach a fair settlement.
• Settlement or decision to pursue legal action (varies): Once negotiations are complete, your claim will either be settled, or you’ll decide if you want to proceed with legal action.

It’s crucial to start this process as soon as possible after the accident. The sooner you gather your evidence, the fresher it will be and the stronger your claim will be.

Common Insurance Company Tactics: How to Fight Back and Win

Insurance companies often employ various strategies to minimize diminished value claim payouts. Here are some typical objections and how to counter them:

Typical Objections from Insurers

Insurance companies may use these common tactics to deny or reduce payouts:

• "We aren't responsible for diminished value"
• "The vehicle was repaired properly, so no diminished value is owed"
• "Your car is too old or has too high mileage for a diminished value claim"
• "The damage was minor and doesn't affect the car's value"

Counter-Arguments

To strengthen your claim, use the following counter-arguments:

• Cite State Laws: Many states allow for diminished value claims, regardless of whether the vehicle was repaired properly.
• Accident History Affects Value: Even a well-repaired vehicle loses value due to its accident history, which impacts resale value.
• Market Data: Provide market data showing value loss for similar vehicles that were in accidents.
• Professional Appraisal: Present a professional appraisal that quantifies the actual diminished value of your car.

4. Does Insurance Automatically Cover Diminished Value?

No, insurance typically does not automatically cover diminished value. You will need to specifically request it and demonstrate how the accident has reduced your vehicle's market value.

5. How Long Do I Have to File a Claim?

The time frame to file a diminished value claim varies by state and insurance company. Generally, you have 2-3 years from the date of the accident, but it's best to check with your insurer or consult a lawyer for state-specific deadlines.

6. What If the Insurance Company Denies My Claim?

If your insurance company denies your claim, you can appeal their decision or take legal action. Working with an attorney or appraiser may help in presenting a stronger case.

7. Can I Claim Diminished Value for a Leased Vehicle?

Yes, you can claim diminished value for a leased vehicle if the accident reduces the vehicle's worth. However, the leasing company may receive the payout, not you.

How Do Luxury Vehicles Differ in Diminished Value Claims?

Luxury vehicles generally have a higher diminished value due to their premium market prices. They may also require specialized appraisers to assess the loss more accurately.