Diminished Value in Auto Accident Claims

car being towed for repairs that will result in diminished value

When it comes to car accident claims, one concept that is often overlooked is “diminished value.” This refers to the reduction in a vehicle’s worth after it has been involved in an accident or sustained significant damage. While most of us know that we can file a claim for the cost of repairs and personal injuries sustained in an accident, you may not be aware that you can also file a claim for diminished value to your vehicle. Let’s take a closer look at what diminished value means and how it factors into auto accident claims.

What is Diminished Value?

Diminished value represents the loss in market value that occurs when a vehicle has been repaired after an accident. Even with expert repairs, many buyers are often hesitant to pay the same amount for a vehicle that has a previous history of damage. The reasoning behind this is simple: accidents can compromise the vehicle’s structural integrity, performance, safety features, and aesthetics, leading to a perception of reduced value.

Types of Diminished Value:

There are generally three types of diminished value that can be considered in automobile claims:


This type of diminished value refers to the reduction in a vehicle’s worth immediately following an accident or damage. It takes into account the visible damage and the immediate impact on the vehicle’s value.


Inherent diminished value is the reduction in a vehicle’s value due to the fact that it was involved in an accident, even after complete repairs have been made. It recognizes the stigma attached to a previously damaged vehicle, regardless of the quality of repairs.


Repair-related diminished value accounts for any potential decrease in a vehicle’s value resulting from incomplete or inadequate repairs. If a vehicle is not restored to its pre-accident condition or if there are noticeable discrepancies in the repair work, it can lead to a further reduction in its value.

Factors Influencing Diminished Value

Several factors contribute to the calculation of diminished value in an automobile claim. These include:

      • Age and mileage of the vehicle: older vehicles with higher mileage generally have a lower initial value, which can further decrease after an accident.
      • Severity of the damage: the extent and nature of the damage sustained by the vehicle plays a significant role. Major structural damage, frame repairs, or airbag deployment can have a more substantial impact on diminished value.
      • Vehicle make and model: the reputation, popularity, and demand for a specific make and model can influence how much diminished value is attributed to the vehicle.
      • Market conditions: local market trends, including supply and demand dynamics, can affect the diminished value assessment.

Filing a Diminished Value Claim

If you are involved in an auto accident, you will want to call your insurance carrier as soon as possible. Make sure to inform them of your plan to file a claim for diminished value. You will provide supporting documentation as requested by the adjuster, much as you would for your personal injury and vehicle repair claims. 

As we mentioned above, several factors can affect the final amount awarded for your diminished value claim. Because of this, it may be wise to consult a professional. You can hire an independent appraisal for diminished damage, for example. He or she can help you calculate a fair amount that you can use to negotiate with your insurance company.

If you feel your insurance company is offering an unfair settlement or is otherwise mishandling your claim, you will want to contact an experienced auto accident and insurance attorney. The last thing you need to worry about after an accident is dealing with bad faith insurance practices

In Colorado, David Roth is a top insurance attorney who fights tirelessly to level the playing ground between his clients and their insurance carriers. If you need legal assistance in any capacity following your car accident, call or go online today to schedule a free consultation.