Understanding Diminished Value Claims

Car accidents happen, but the aftermath can leave a lasting impact on your vehicle's worth. Even after repairs, a car might not regain its pre-accident value, leading to what's known as diminished value.  

So, what do you do as a car owner in this situation? Should you just ignore the fact that you will never be able to sell your vehicle for its pre-accident price? Fortunately, you may be able to get compensation for the difference in the value of your car by filing a diminished value claim. As a car accident attorney at Antaramian Law, APC, I help clients pursue the compensation to which they are entitled. This also includes filing diminished value claims.  

What Is a Diminished Value Claim? 

A diminished value claim is a request for compensation based on the reduction in a car's market value after an accident, even after proper repairs are made. It's a fact that once a vehicle is involved in an accident, its value decreases, as potential buyers often view it as less desirable compared to a similar vehicle that hasn't been in a collision. 

After all, even the best repairs can't fully restore a car to its original condition. The stigma of having been in an accident remains, no matter how well the repairs were done. For car owners, understanding the concept of diminished value claims—and knowing when to file one—can mean recovering financial losses that are otherwise hidden. 

• Fact: Even in motor vehicle accidents with property damage only (no injuries), the average economic cost of the crash is over $6,000, according to the National Safety Council.  

Types of Diminished Value Claims 

By filing a diminished value claim, you're essentially asserting that your vehicle is worth less because of the accident and requesting compensation for that loss in value. But which types of diminished value claims are there?  

• Immediate diminished value: This type of claim refers to the initial reduction in a vehicle's resale value immediately after an accident occurs. Even before any repairs are undertaken, the awareness that a vehicle has been in an accident can decrease its perceived value. It's the gap between the car's value before the accident and its current state immediately after. Immediate diminished value is often the hardest to quantify, as it requires a quick assessment and may involve expert evaluations.  

• Inherent diminished value: Inherent diminished value is the most common type of claim and refers to the loss in value that remains after all repairs have been completed. It acknowledges that a properly repaired vehicle still suffers a loss in value simply due to its accident history. Potential buyers often see vehicles with an accident history as less attractive, regardless of how well repairs were executed. This type of claim is often more straightforward to pursue than immediate diminished value. 

• Repair-related diminished value: This type of claim arises when the repairs themselves fail to fully restore the vehicle to its pre-accident condition. Subpar repairs can lead to this form of diminished value, where visible defects or reduced functionality affect the vehicle's overall worth. If repairs are poorly performed or if non-original parts are used, the car's value can take a hit.  

Regardless of what type of diminished value claim you have, you will need to prove that (a) the value of your car was diminished due to the accident and (b) there wasn’t any pre-existing damage.  

Calculating a Diminished Value Claim 

Understanding how to calculate a diminished value claim can be complex, but here's a simplified breakdown: 

• Determine the value of your car: Start with the pre-accident market value of your vehicle. 

• Apply a 10% cap to that value: Many insurers cap the maximum claim at 10% of the car's value. 

• Apply a damage multiplier: Assess the extent of damage and apply a multiplier (ranging from 0.00 for no structural damage to 1.00 for severe structural damage) to adjust the claim value. 

• Apply a mileage multiplier: Consider the car’s mileage, as higher mileage typically reduces value further. Use a mileage multiplier to adjust accordingly. 

Calculating a diminished value claim may require the assistance of a car accident attorney. At Antaramian Law, APC, I can help you determine an accurate diminished value for your damaged vehicle and file a claim.  

Who Can File a Diminished Value Claim?  

To file a successful diminished value claim, certain criteria must be met: 

• The other party was at fault: Typically, you can only file a claim if the accident was not your fault. 

• You own the car: The vehicle must be owned, not leased. 

• You own a high-value vehicle: More expensive vehicles often face greater losses in value after an accident. 

• You meet title requirements: Vehicles with clear titles are more likely to qualify. Salvage titles can complicate claims. 

• You live in a state that allows it: Not every state permits diminished value claims. Consult with an attorney in your state to learn more.  

You will need to gather evidence that your car has lost value, such as an unbiased appraisal, and submit it along with a demand letter to the insurance company. An attorney can assist you with the steps of filing a diminished value claim to get the best possible settlement.  

Let Me Help You With Your Diminished Value Claim 

Even if you aren’t planning to sell your car in the foreseeable future, the mere fact that your vehicle now has a diminished value through no fault of your own can be frustrating. If your vehicle was damaged in a car crash, I might be able to help you recoup the loss to your car’s value through a diminished value claim. At Antaramian Law, APC, I serve clients in Los Angeles, California, and throughout Riverside County, Kern County, Orange County, Ventura County, and San Bernardino County. Contact my office today to schedule a free case review.