- 1 How To File a Diminished Value Claim
- 2 What is Diminished Value?
- 3 Types of Diminished Value
- 4 Court Decisions about Diminished Value
- 5 Information about Diminished Value
- 6 Companies Providing Diminished Value Appraisals & Claims Help
How To File a Diminished Value Claim
4 Steps to File a Diminished Value Claim
1) Obtain a copy of the final supplement from the insurance company for your car.
2) Bring the supplement to 3 different dealerships within a 100mile radius of your zip code and ask for the value they would give you for the car with those damages.
3) Go to the dealership where you bought the car (or any other dealership) to ask for the value of the car as if it was never in an accident.
4) Submit everything to the insurance company for the car that caused the accident with a written letter stating you are submitting a diminished value claim for the damages to your vehicle.
5) The insurance company will call you and attempt to negotiate with you.
Tip: It’s best to hire a diminished value professional to do this for you.
What is Diminished Value?
Diminished value is the lowered market value of a car or vehicle after it has been repaired as compared to your vehicle before it was damaged or repaired.
Your car will be worth less money even after it has been repaired from an accident because its condition has been changed and is no longer “original”.
Given the choice of purchasing two identical cars, one in excellent condition and one which has been repaired after an accident, which one would you buy if they were both the same price? Of course, you would pay less for the one that was in an accident.
Even a ding can cause a loss of thousands of dollars. A Ferrari that had a fender repainted because of a parking lot ding is worth substantially less than it was. That’s what diminished value is.
Because of databases like Carfax which provide a vehicle history report, it’s easy for a potential buyer to discover problems about your car while searching. Because of databases, your car’s value is worth less money even before someone looks at your car. The databases only record major problems but potential buyers looking at your car may see the minor ones.
When your vehicle is a total loss, you should know its value. If your vehicle is repaired, find out its diminished value.
This video shows how the cost of diminished value hurts you
Types of Diminished Value
First-Party Claim – Your Own Insurance Company
Some states allow you to be reimbursed for diminished value from your own insurance company when you have collision coverage.
When you are claiming against your collision coverage on your own insurance policy, it is called a first-party claim.
When seeking diminished value with a first-party claim, you must not be at fault for the accident in most of the states which allow diminished value.
Collecting diminished value from your own insurance policy is much easier because your insurance company owes a duty to you, the policyholder.
Third-Party Claim – Against Someone Else’s Insurance Company
When someone else is at fault for causing the accident or damage to your car, that person or company is responsible for diminished value.
When you seek reimbursement from someone else or their insurance policy, it is called a third-party claim.
Collecting diminished value through a third-party claim against someone else’s insurance policy is much more difficult because their insurance company does not owe a duty to you, since you are not the policyholder. Their insurance company only owes a duty to their policyholder.
You will probably have to file a lawsuit because the insurance company for the person at fault will not want to pay for diminished value.
Court Decisions about Diminished Value
On April 18, 2005, the United States Circuit Court of Appeals for the Fifth Circuit held that State Farm Mutual Automobile Insurance Company was not liable for the diminished post-repair value of vehicles under their policy’s definition for coverage of “cost of repair.”
The court also concluded that State Farm’s automobile insurance policy’s preclusion of reimbursement from the insurer for diminished value post-repair was not against Mississippi state public policy, or unconscionable.
This case involved State Farm insureds, who had submitted first-party claims to the automobile insurer under their collision coverage for repairs and reimbursements for accidental losses to vehicles, alleging that they should have been compensated for the lowered market value of vehicles post-repair. Blakely v. State Farm Mutual Automobile Insurance Company (5th Cir. (Miss.) April 18, 2005)
However, for New York, there’s good news. The New York Appellate Court Held that Third-Party Diminution in Value Damages Are Recoverable in addition to the cost of repairs for personal property that appreciates in value (Franklin Corporation, Appellant v Justin M. Prahler, Respondent)
Information about Diminished Value
Primer on Diminution in Value Claims – Claims Journal
Does your insurance policy have ISO’s diminution in value exclusion endorsement? – Even if your state allows a claim for diminished value, you may not be able to file a claim for it.
OEM Parts – Are you entitled to brand-name car repair parts? Know your rights.
Can replacing a windshield cause diminished value? (HURT911® article) – Using the wrong replacement windshield can result in diminished value on a car you own and cost you money on a leased car.
Invalid Diminished Value Claim Denials – 8 Unfair Examples
Recouping Expenses and Sales Tax – after your car is totaled and a list of states that require you to be reimbursed for sales tax.
NADA – For over 67 years, N.A.D.A. has been America’s largest publisher of used vehicle values.
Galves – The wholesale book that car dealers use.
Companies Providing Diminished Value Appraisals & Claims Help
List of Diminished Value Professionals – search by state for Diminished Value Professionals and Property Damage ParaLegals.
Lost Value Recovery Specialists – With over a decade of experience in the insurance industry, we have a combined wealth of knowledge and a number of professional experts available to assist in recovering the maximum amount of money that is legally owed to you.
CollisionClaims.com – After collision damage is repaired, your vehicle will be worth less than before it was damaged. This loss in value is known as Diminished Value. If you were not at fault in the accident, the at-fault party (or their insurance company) owes you money. This applies in all 50 states. As independent vehicle appraisers, we can help you determine how much you’re owed and provide detailed instructions on how to get paid.
Autoloss – is your diminished value claim expert proudly providing Diminished Value claim services for Diminished Value claims, diminished value appraisers & helping you with all your diminished value questions.
WreckCheck – Free diminished loss calculator. When you use the calculator, they will put you in touch with someone to help you.
Auto Appraisal Group, Inc. – Nationwide appraisals to prove diminished value and appraisals for other purposes.