How to File a Diminished Value Claim

When the value of your car decreases due to a collision, you may be able to recoup those losses by filing a diminished value claim.

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Renata joined The Zebra in 2020 as a Customer Experience Agent. Since 2021, she has worked as licensed insurance professional and content strategist.…

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What is a diminished value insurance claim?

A diminished value claim is filed to compensate for the reduced resale value of a vehicle after an accident, usually submitted after repairs to the vehicle are made. However, if you were responsible for the accident, you're unlikely to receive compensation for this claim. 

Typically, diminished value claims are directed towards the insurer of the at-fault party, as many insurers and states limit claims against your own insurance. However, if the at-fault party's insurer doesn't cover diminished value claims, you may have the option to file through your state.

Key Takeaways:

  • After your car is damaged, its value may drop, possibly qualifying you for a diminished value claim.
  • Research your state's laws and insurer's policies before filing, as regulations vary.
  • Since diminished value claims are more complex to file and harder to collect on, obtain an official appraisal, keep thorough records, file quickly, and follow up consistently.
  • Filing a claim is worthwhile if you're not at fault, it's allowed in your state and by the at-fault party's insurer, and the loss is substantial.

What is diminished value?

Diminished value, or diminution of value, refers to the difference in the market price of a vehicle before and after an accident. Even if your car is fully repaired, its involvement in a collision means its value is lower than that of a similar vehicle not involved in a crash.

How does diminished value differ from depreciation?

Depreciation is the natural and gradual decline in a vehicle's value over time due to factors like age, mileage, and wear and tear, regardless of its accident history. Diminished value is when a car's resale price drops after it's been fixed from damage, mainly because people see it differently due to its past.

Three types of diminished value

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Immediate diminished value

This type represents the difference in the resale value of the car immediately following the accident, but before repairs have been made. This type is rarely used in diminished value claims, as repairs are most often made immediately after accidents.

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Inherent diminished value:

The most common form used in claims, inherent diminished value represents the amount the vehicle’s worth will reduce based on accident history, assuming all repairs have been made to optimal quality.

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Repair-related diminished value

While inherent diminished value is dependent on high-quality repair jobs, repair-related diminished value is used when the repairs made to the vehicle are of sub-standard quality — for example, if aftermarket parts are used or the paint color on the replaced part is not an exact match to the original. This type assumes that the vehicle cannot be restored to its original condition.

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How to file a diminished value insurance claim

The diminished value claims process typically begins after vehicle repairs have been completed because the extent of the vehicle's diminished value can only be accurately assessed post-repair. The process includes the following:

  1. Verify your state allows diminished value claims
  2. Verify your insurer accepts diminished value claims
  3. Get your vehicle professionally appraised
  4. Gather documentation
  5. Submit a claim
  6. Carefully review the settlement offer
  7. Negotiate (if needed)
  8. Accept the settlement offer


1. Verify that your state allows diminished value claims.

Every state has different laws regarding diminished value claims. Click each state to see more specifics on insurance-related laws.

2. Confirm the insurance company accepts diminished value claims. 

Not all companies cover diminished value. Make sure you read and understand your insurance policy regarding diminished value coverage and any deadlines for filing claims.

If you were the party at fault for the accident, you are not likely to receive a claim payout. You are much more likely to have success with the insurance company if the accident was caused by someone else.

Note: If the at-fault driver is uninsured, you will need to have had uninsured motorist coverage on your policy in order for a diminished value claim to be processed.  You may be entitled to file a claim with the state if you live in one of the states listed above. Contact your state’s department of insurance to proceed.


3. Get your vehicle professionally appraised.

We recommend always using a licensed vehicle appraiser as they provide credible documentation for insurance claims, ensuring legal compliance, and potentially strengthening your negotiation position with your insurer. They provide an official written report, usually for a flat or hourly fee.


Want a quick unofficial estimate?

We've created a convenient Diminished Value Calculator based on the 17c formula used by insurance companies.

4. Gather your documentation.

This will likely include:

  • The accident report (comes from law enforcement)
  • The appraisal report (from a licensed vehicle appraiser)
  • Repair invoices (should detail dates and costs of repairs)
  • Photographs (from multiple angles, before and after repairs)
  • Comparable vehicle listings (listings of similar vehicles in your area without a history of damage, showing their resale value)
  • Any correspondence with the insurer (including letters, emails, and notes from phone conversations)


5. Submit a claim.

Notify the insurance company of the at-fault party of your intent to file a diminished value claim and provide them with all required documentation. Ensure you follow their specific procedures for claims submission. See the note on step two for what happens if the at-fault party is uninsured.


6. Review the settlement offer carefully.

If the insurance company offers a settlement for your diminished value claim, review the offer carefully before accepting. Make sure it adequately compensates you for the diminished value of your vehicle based on the evidence and documentation you've provided and ensure you understand any attached conditions or agreements before accepting.


7. Negotiate (if necessary).

This isn't negotiation in the traditional sense, instead, it involves presenting more compelling evidence of your vehicle's diminished value. Be prepared to advocate for your interests, considering factors like the extent of the vehicle's damage, the quality of repairs, its pre-accident value, any related expenses incurred, depreciation rates, and the documentation you have gathered to support your claim.

With a strong case and persistence, you can improve your likelihood of receiving fair compensation.


8. Accept the settlement offer.

If you agree to the settlement terms, accept the offer and follow any necessary procedures to finalize the claim. This often includes signing a release or waiver agreement which releases the insurance company or responsible party from any further liability related to the diminished value claim.

Best practices in filing diminished value claims

File the claim ASAP

Don't delay in filing your diminished value claim. Most insurance companies have deadlines for filing claims, so be sure to adhere to these timelines to avoid any potential complications.

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Be prepared for negotiations

Diminished value claims are more complex to file and harder to collect. Part of why we recommend always using a licensed auto appraiser is they provide credible documentation for insurance claims, ensuring legal compliance, and strengthening negotiation positions.

Document everything

Keep detailed records of all interactions, correspondence, and transactions related to your diminished value claim. This documentation can serve as valuable evidence in case of disputes or discrepancies.

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Don't be afraid to be persistent

Don't hesitate to follow up with the insurance company if you haven't received a response or if there are delays in processing your claim. Persistence can help move the process along and ensure your claim receives proper attention.

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Consider reaching out for legal advice

Consider seeking legal advice if you face significant challenges or disputes during the claims process, if the insurance company denies or undervalues your claim or if you're uncertain how to proceed legally.

Remember, litigation isn't your only option. You can also explore alternatives like mediation, arbitration, and small claims court, which may be more affordable and less burdensome.

Is filing a diminished value claim worth it?

Ultimately, that is up to each driver to determine. However, it's generally a good idea to file a diminished value claim when an accident not caused by you significantly lowers your car's resale value and your state and the at-fault party's insurance policy permit such claims.

When You Should File A Diminished Value Claim
  • Post-accident. If an accident lowers your car's value.

  • When you're not at fault. Your insurance doesn't typically cover diminished value claims if you are deemed at fault.

  • Your state and insurer allow it. Confirm that both your state's laws and the at-fault party's insurance policy permit diminished value claims.

  • The loss is significant. Otherwise, it might not be worth the time the claims process demands.

When You Shouldn't File A Diminished Value Claim
  • When you're at fault. Most companies don’t allow you to file a claim against your own policy for diminished value.

  • Your vehicle is older, has high mileage, or received minor damage. The slight decrease in value likely won't be worth the hassle.

  • The at-fault party's insurer doesn't allow it. However, if the state allows it, don't forget that you might be able to file with your state.

  • Your state doesn't allow it. See our list of at-fault value states.

If you've already filed a claim and seen a rate increase, it's a good idea to see if other insurers can offer you a better price. Enter your zip code below to compare quotes side-by-side or check out The Zebra's Guide to Car Insurance Quotes for additional information.

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About The Zebra

The Zebra is not an insurance company. We publish data-backed, expert-reviewed resources to help consumers make more informed insurance decisions.

  • The Zebra’s insurance content is written and reviewed for accuracy by licensed insurance agents.
  • The Zebra’s insurance editorial content is not subject to review or alteration by insurance companies or partners.
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