How to File a Diminished Value Claim
- Diminished value means your car may be worth less after an accident, even if it’s been fully repaired.
- To file a claim, you’ll need to show the at-fault driver’s insurance company how the accident lowered your car’s resale value.
What is diminished value in car insurance?
If your car has been in an accident, even after it's been repaired, it may lose resale value simply because it now has a damage history—this is called diminished value. A diminished value claim lets you request compensation from the at-fault party’s insurance to make up for that difference. It’s a way of saying, “My car isn’t worth what it used to be, and someone should pay for that.”
💡 Not everyone thinks to file a diminished value claim, but if you're not at fault and your vehicle is relatively new or high-value, it might be worth it.
When to file a diminished value claim
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. If your car is new or high value, Otherwise, it might not be worth the time the claims process demands.
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 states that allow diminished value claims.
Diminished Value Calculator
Calculate how much your car's value diminished after an accident
How to file a diminished value claim
If you meet the criteria above and decide to move forward, here’s how to navigate the claims process:
Not all insurance companies cover diminished value, so it’s important to review your policy carefully—including any deadlines for filing a claim. In most cases, you’ll only be eligible for a payout if the other driver was at fault. If you caused the car accident, a diminished value claim is unlikely to succeed.
⚠️ Note: If the at-fault driver was uninsured, you’ll need to have uninsured motorist coverage on your policy to file a diminished value claim.
Every state has different laws regarding diminished value claims, so be sure to expand the section below to verify your state’s status. You can also contact your state’s department of insurance for more guidance.
Documentation is your friend when filing a claim of any type, but this is especially true with diminished value. Gather information on your car's market value by using tools like Kelley Blue Book or NADA. Then, prove that the value is now diminished by the car accident— include photos, relevant documents to help support your claim.
🔔 Zebra tip: Get your car professionally appraised We recommend using a licensed vehicle appraiser—they’ll give you a credible, written report that can strengthen your claim and ensure legal compliance. Most charge a flat or hourly fee.
Let the at-fault driver’s insurer know you’re filing a diminished value claim and send over all required documents. If they’re uninsured, you'll be working with your own insurance company.
When you get a settlement offer, read it closely. If it doesn’t reflect your car’s true loss in value, push back with solid evidence—like your appraiser’s report or repair history.
Once the offer feels fair, accept it and follow the steps to wrap things up—usually signing a release to close the claim.
🚗 The Incident: You're hit by another driver who runs a red light. They're found at fault and insured with State Farm. Your car is repaired, but its value has dropped due to the accident history. You want to file a diminished value claim.
1. Report the accident & gather documentation
- Call the police and get an official report.
- Exchange insurance info and notify State Farm that you’ll be filing a claim— confirm your state and State Farm accept diminished value claims.
- Take clear photos of the damage and save all communication.
2. Repair Your Vehicle & Track Everything
- Take your car to a licensed repair shop and get it fixed.
- Save invoices, photos, and a repair summary—these prove the extent of the damage. Keeping a paper trail from day one strengthens your claim later.
3. Determine Your Car’s Diminished Value
Step-by-step Diminished Value Math:
- Pre-accident market value (from Kelley Blue Book): $12,000
- Apply the 10% cap most insurers use:
→ $12,000 × 10% = $1,200
(This is your base cap for potential loss in value.) - Now factor in damage severity. Let’s say the accident caused moderate panel and structural damage:
→ $1,200 × 0.50 (moderate damage factor) = $600 - Your car has 20,000 miles, a relatively low figure:
→ $600 × 0.80 (mileage modifier) = $480
Estimated diminished value: $480
You may also hire a professional appraiser to verify this or uncover a higher actual loss value—especially helpful if you disagree with the insurer's number.
4. File Your Diminished Value Claim with State Farm
Send a formal demand letter to State Farm including:
- The police report
- Repair invoices and receipts
- Pre- and post-accident photos
- Your valuation math or third-party appraisal
State clearly that you are requesting $480 (or your appraiser’s value).
5. Review the Offer, Negotiate, and Finalize
- State Farm might accept, counter, or deny the claim.
- If their offer is low, respond with your evidence and professional appraisal, if available.
- Stay persistent—escalate to a supervisor or consider mediation or small claims court if needed.
- Once you reach a fair amount, sign the release and get your payout
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Types of diminished value claims
Diminished value vs. 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.
Best practices in filing diminished value claims
File the claim ASAP
Most insurance companies have deadlines for filing claims, so be sure to adhere to these timelines to avoid any potential complications.
Build a strong case
Diminished value claims can be tricky to win. Use a licensed auto appraiser to back your claim with credible documentation. It’s your best shot at getting taken seriously during negotiations.
Keep a paper trail
Save everything—emails, calls, receipts. A detailed record can make all the difference if your claim hits a snag.
Stay persistent—and know your options
Follow up if things stall. If your claim’s denied or lowballed, legal advice or options like mediation or small claims court may help you move forward.
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.
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.
Compare car insurance quotes and find a policy that fits your needs.
Diminished value: FAQs
Diminished Value of a Car: Estimations After an Accident. Kelley Blue Book
What is diminished value? | Insurance Information Institute
Consumer Vehicle Values | NADA
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