Diminished Vehicle Value

What is diminished value?

Diminished value is the lowered market value of a car or vehicle after it has been repaired as compared to a vehicle which was not damage or repaired. Your car will be worth less even after it has been repaired from an accident.

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 which has to have 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 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 it’s value. If your vehicle is repaired, find out its diminished value.

Types of Diminished Value

Some states allow you to be reimbursed for diminished value from your insurance company when you have collision coverage. When you are claiming against 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.

However, when someone else is at fault 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. The problem with collecting diminished value with a third party claim against someone else’s insurance policy is that you will probably have to file a lawsuit because the insurance company (or person at fault) will not want to pay for diminished value.

Court Case 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 diminished post-repair value of vehicles under their policy’s definition for coverage of  “cost of repair.” The court also concluded that the 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 matter involved insureds, who had submitted claims to the automobile insurer for repairs and reimbursements for accidental losses to vehicles, alleging that they should have been compensated for 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)

More Information about Diminished Value

Diminished Value in all 50 States

Diminished Value Law By State – Bad Faith Insurance By State

Primer on Diminution in Value Claims – Claims Journal

Recovery of Diminished Value in First Party Property Insurance Claims – From the American Bar Association Insurance Coverage Litigation Committee CLE (Continuing Legal Education) Seminar

Does your insurance policy have ISO’s diminution in value exclusion endorsement? – Even if your state allows a claim for it diminished value, you may not be able to file a claim for it.

Diminished Value Tips & FAQ

List of Diminished Value Professionals by state

CollisionClaims.com –  After repaired collision damage, your vehicle will be worth less. 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 your owed and provide detailed instructions on how to get paid.


OEM Parts – Are you entitled to brand-name car repair parts? Know your rights.

Recouping Expenses – after your car is totaled and a list of states that require you to be reimbursed for sales tax.

What To Do When You Don’t Want Your Car Totaled

How to evaluate a diminished value claim

How to submit a diminished value claim

NADA – For over 67 years, N.A.D.A. has been America’s largest publisher of used vehicle values.


Kelly Blue Book

Galves – The wholesale book that the car dealers use.