What Is a Diminished Value Claim?

March 6, 2024 | By Mike Hancock
What Is a Diminished Value Claim?

If you’ve been in a car wreck that wasn’t your fault, one that severely damaged your car, you might consider filing a diminished value claim against the at-fault driver. You’ll do this because your car’s value has decreased or diminished due to the other driver’s negligence.

But you need to know you might find getting the money you deserve challenging. If this proves to be the case, a skilled car accident attorney in Spring Hill can help with your diminished value claim. (Note that most car accident lawyers will not take property damage claims, including diminished value cases, unless they also involve personal injuries.)

The following is a look at the steps you’ll take to file the claim and how a lawyer can work to pursue compensation if the insurer doesn’t cooperate.

The Basics

There are about five million car wrecks in the US each year. In Florida alone, there were 393,657 accidents in 2023. Most collisions result in damage that’s significant enough to file an insurance claim. In many instances, drivers who are not to blame for a wreck will file diminished value claims against the insurer covering the at-fault motorist.

What Is a Diminished Value Claim

What is a diminished value claim, exactly? It’s a form of legal recourse pursued by individuals whose property, typically vehicles, has suffered a decrease in resale value due to an accident or incident. Unlike claims for property damage repairs, which aim to restore the damaged item to its pre-accident condition, diminished value claims seek compensation for the inherent loss in value that occurs even after repairs are completed.

Suppose your car was worth $20,000 before the accident. It’s now worth $10,000 after repairs. You can file a diminished value claim against the at-fault driver’s insurer for the difference.

When a vehicle is involved in an accident, it may sustain damage that, even when fully repaired, leaves a stigma affecting its market value. Potential buyers are often hesitant to pay the same price for a vehicle that has been in an accident, regardless of the quality of repairs. This reduction in resale value is known as diminished value.

It doesn’t seem fair that your car isn’t worth as much after repairs. Even though your vehicle might not look like it was in a wreck, damage still occurred. The car might not be as reliable as before the accident or not as safe. It might not last as long as it would have if the accident didn’t happen. Those are some of the reasons it has diminished value. 

To pursue a diminished value claim, you must provide evidence supporting the decrease in the vehicle’s value, such as appraisal reports, repair estimates, and documentation of comparable vehicle sales in the local market. You may also need to prove that the diminished value is the direct result of the accident and the car didn’t have any pre-existing damage.

Three Types of Diminished Value Claims

You might pursue three main types of diminished value claims to seek compensation for the loss in value of your property following a collision. The following is a brief description of each.

Inherent Diminished Value

Inherent diminished value refers to the reduction in resale value that occurs due to the fact that a vehicle has been involved in an accident. This type of diminished value is inherent to the vehicle’s history. Potential buyers typically look at a car with an accident history as damaged. This stigma often leads them to offer lower prices than similar vehicles with no accident history.

A repair-related diminished value claim occurs when the vehicle repairs are inadequate or fail to restore its pre-accident condition fully. Despite the repairs, the vehicle may still exhibit signs of damage or repair work, which can negatively impact its resale value. Repair-related diminished value claims seek compensation for the difference between the vehicle’s pre-accident value and its diminished value after repairs.

Immediate Diminished Value

This refers to the loss in value that occurs immediately following an accident before any repairs are made. This type of diminished value takes into account the perception of potential buyers who may be reluctant to purchase a vehicle with a known accident history, even if the damage has not yet been repaired. Immediate diminished value claims aim to recover the difference between the vehicle’s pre-accident market value and its diminished value immediately after the accident.

How to File a Diminished Value Claim

Assess the Damage

Filing a diminished value claim can be a complex process, but with careful preparation and attention to detail, you can increase your chances of success. Here are steps to successfully file a diminished value claim.

Assess the Damage

Before filing a diminished value claim, assess the damage to your vehicle. Document the extent of the damage, take photographs from multiple angles, and gather any relevant information about the accident, including police reports and witness statements. Understanding the scope of the damage is crucial for accurately determining the diminished value.

Obtain Repair Estimates

Obtain repair estimates from reputable auto repair shops or dealerships. These estimates should detail the cost of repairing the damage and restoring the vehicle to its pre-accident condition. Keep records of all estimates and any repairs performed, as they will be essential evidence when filing the diminished value claim.

Research Comparable Vehicles

Research comparable vehicles in your area to determine their market value. Look for vehicles of the same make, model, year, and condition as yours, both with and without accident history. This information will help establish the pre-accident market value of your vehicle and provide a basis for calculating the diminished value.

Calculate Diminished Value

Calculate the diminished value of your vehicle using reputable methods and valuation tools. Consider the damage’s severity, the vehicle’s age and mileage, and market trends. Various formulas and methodologies, such as the 17c formula or the market comparison approach, can be used to estimate the diminished value.

Gather Supporting Documentation

Collect all the relevant documentation you can to support your diminished value claim. This documentation may include repair invoices, appraisal reports, photographs of the damage, vehicle history reports, and records of comparable vehicle sales. The more evidence you can provide to substantiate your claim, the stronger your case will be.

Draft a Demand Letter

Draft a demand letter to the insurance company outlining the accident’s details, the damage’s extent, and your diminished value claim. Be clear and concise in explaining why you believe you’re entitled to compensation for the loss in value of your vehicle. Attach copies of all supporting documentation to the demand letter.

Negotiate with the Insurance Company

Be prepared to provide additional evidence or answer any questions the insurer may have about your claim. It may be necessary to go back and forth with the insurance company to reach an agreement on the settlement amount.

Review and Accept the Settlement Offer

Carefully review any settlement offer the insurance company makes. Evaluate whether the offer adequately compensates you for the diminished value of your vehicle and covers all related expenses. If the settlement offer meets your expectations, sign the necessary paperwork to accept the settlement and finalize the claim.

Follow Up and Close the Claim

After accepting a settlement offer:

  • Follow up with the insurance company to ensure that they process all necessary paperwork promptly.
  • Once the claim is closed, keep copies of all documentation for your records.
  • If there are any outstanding issues or concerns, address them promptly to avoid further delays or complications.

By following these steps and being thorough in your preparation, you can successfully file a diminished value claim and receive fair compensation for the loss in value of your property resulting from an accident or incident.

How an Attorney Can Help

Accept the Settlement Offer

What if you take all the above steps and the insurer refuses to make a fair offer for your diminished value claim? What if you would rather not deal with all the above because you don’t have time for the hassle? You should seriously consider speaking with a skilled, experienced car accident attorney.

You would think the insurer would do the right thing. After all, it’s not uncommon for auto insurers to write $20, $30, or even $40 billion in annual premiums. It’s no wonder car insurance companies make so much money, considering Floridians pay an average of more than $300 monthly for full coverage.

However, insurance companies are notorious for refusing to pay claims, regardless of their validity. If this is happening to you, a lawyer can help.

When dealing with a diminished value claim, navigating the complexities of insurance policies and negotiating with insurance companies can be daunting, especially if the insurer proves difficult or uncooperative. Here’s how an attorney can assist you if the insurance company proves difficult:

Attorneys with experience in diminished value claims possess in-depth knowledge of relevant laws, regulations, and legal precedents. They understand the intricacies of insurance policies and can interpret the fine print to determine your rights and obligations. Their experience allows them to navigate the legal framework surrounding diminished value claims and devise effective strategies to pursue your case.

Evidence Gathering

One of the most critical aspects of a successful diminished value claim is gathering compelling evidence to support your case. Attorneys have the resources and experience to collect and analyze evidence effectively. They can obtain repair estimates, appraisals, vehicle history reports, and other documentation necessary to substantiate your claim. 

Attorneys may also work with expert witnesses, such as auto appraisers or accident reconstruction specialists, to provide expert testimony in support of your claim.

Negotiation Skills

Insurance companies often employ tactics to minimize payouts and protect their bottom line. They may dispute the validity of your claim, undervalue your losses, or offer low settlement amounts. Attorneys skilled in negotiation can advocate on your behalf and negotiate with the insurance company to secure a fair and equitable settlement. They can present persuasive arguments, counter the insurer’s objections, and leverage their negotiation skills to achieve a favorable outcome.

Legal representation is crucial if negotiations with the insurance company reach an impasse or litigation becomes necessary.

Attorneys can represent you in negotiations, administrative proceedings, or court hearings, ensuring your rights are protected and advocating for your best interests. They can file legal motions, prepare legal briefs, and present evidence in court to strengthen your case. With an attorney by your side, you can confidently navigate the legal process and maximize your chances of success.

Litigation Support

In some cases, insurance companies may refuse to offer a fair settlement. If this happens, litigation will be required to resolve the dispute. Attorneys experienced in litigation can provide valuable support throughout the legal process. They can file lawsuits on your behalf, engage in discovery to obtain additional evidence, depose witnesses, and represent you in court proceedings. With their litigation experience, attorneys can effectively argue your case before a judge or jury and pursue maximum compensation for your losses.

Peace of Mind

Mike Hankcock, Car Accident Lawyer
Spring Hill Car Accident Attorney, Mike Hancock

Dealing with a difficult insurance company can be stressful and overwhelming, especially when you’re already grappling with the aftermath of an accident. By hiring an attorney to handle your diminished value claim, you can alleviate some of the burden and focus on your recovery. Attorneys can handle all communication and negotiations with the insurance company on your behalf, providing you with peace of mind knowing that your case is in capable hands.

With their legal experience, evidence-gathering capabilities, negotiation skills, and litigation support, attorneys can level the playing field and work to ensure that you receive fair compensation for the loss in value of your property.

An Experienced Car Accident Attorney is Waiting for Your Call

If you’re having issues with your diminished value claim, you no longer have to put up with the frustration. A skilled car accident lawyer will be ready to fight for your rights. They’ll do all they can to force the at-fault driver’s insurance company to pay the money you deserve.

Don’t assume you must accept an insurer’s refusal to do the right thing. A car accident attorney can force them to do precisely that while you focus on what’s most important to you.

Mike Hancock


People involved in serious accidents experience loss and often don’t know what to do next. Tampa Personal Injury Attorney Mike Hancock has dedicated his career to handling the recovery process for his clients so that their lives can get back to normal.

Mike has excelled in personal injury litigation for over 30 years and even though that’s earned him numerous professional honors, what’s most important to him is meeting directly with you and his commitment to giving you peace of mind.

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