Glossary
Diminished value claim, defined
A demand for the drop in a vehicle's resale worth after it has been repaired from a collision, on the basis that a car with an accident history sells for less than an identical one without.
In practice
Most auto policies exclude it under your own collision coverage, so it is brought against the at-fault driver's liability insurer as part of the property damage claim. Whether a third-party carrier must pay it depends on the state; in some it is well established, in others resisted. Proof usually takes an independent appraisal comparing pre- and post-repair market value. It is worth pursuing on newer, higher-value cars with a clean prior history and rarely worth the effort on an older car. The state's limitation period for property claims sets the deadline. A few carriers offer an endorsement to cover it on your own policy.
A worked example
Suppose a two-year-old SUV worth $38,000 is rear-ended and repaired for $12,000. An appraiser reports a buyer would now pay $33,000. The owner claims $5,000 from the other driver's liability carrier, in addition to the repair. Hypothetical figures.
Applies to: Auto Insurance