How to Make a Diminished Value Car Insurance Claim


Want to help make sure you recoup the full value lost in a car accident? Learn how to make this special kind of claim, courtesy of our friends at

The point of car insurance is to make you whole again after an accident.

But no matter how expertly repaired, a car with an accident history will likely be worth less than one without–even if the car looks as good as new and runs better than it ever has.

A car that has never been in a crash may be worth $15,000 at resale but thousands less if it has been in an accident and repaired. There’s a way to make up the difference: a diminished value claim.

diminished value claim

Diminished value insurance claims allow car owners to recover the difference between a car’s pre-accident value and its value after repairs.

Don’t expect the insurance company to help.

Some car owners file on their own, but others hire a private company to document the lower value. If the insurance company resists, owners may have to take them to court.

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“It’s definitely a challenge,” says Shane Fisher, an attorney in Winter Park, Fla. “You have to put up a fight.”

Before and After

If the accident was your fault, don’t expect to be able to claim diminished value against your own policy. Few states — and few insurance contracts — allow it. The same applies to cars that are flooded but not totaled out; you typically can’t file for diminished value against your own coverage.

But if someone hits your car, nearly every state allows diminished value claims from an at-fault party’s insurance company. Even if the person who hit you is uninsured, about half of the states allow diminished-value collection on your own uninsured motorist property damage coverage. (See “Why you don’t have enough uninsured motorist coverage.”)

Even so, “just because state law allows a diminished value claim doesn’t mean insurers are required to pay it,” says consumer analyst Penny Gusner. “Don’t expect the process to be easy.”

For a successful claim, you’ll need an appraisal of the car’s value both before the accident and after the repairs have been done.

“In the majority of cases it’s considered the vehicle owner’s responsibility to prove their loss,” says Richard Hixenbaugh, owner of Collision Claim Associates, a company that charges $300 to $400 to document a loss of value.

Making a Diminished Value Insurance Claim

An appraisal is the first step to a successful claim, even if you don’t plan to sell the car, Hixenbaugh says. The diminished value is based on how much less money the car would be worth if you were to sell it.

That loss in value can come because repairs did not restore the car adequately — mismatched paint, for example — or simply because the car’s history is now tainted. About 70 percent of used cars are sold to dealers, Hixenbaugh says, who will look up the history of a car to see if it has been in an accident. So, too, will many private buyers.

“No one is going to offer you more money because your car was in a major accident,” Gusner says.

You can get a pre-accident private party value from online resources such as or Kelley Blue Book. Then you must document what your car is worth after the repairs have been done.

Fisher, the attorney, recommends getting a trade-in value letter from a car dealer stating that the lower value is due to previous damage done to the car, even though it has been repaired.

Now for the Hard Part

You will have to ask the other party’s insurance company to be compensated for the diminished value. You may have to ask more than once. (See “What you need to know about car insurance claims.”)

It’s a negotiation, Hixenbaugh says. Some insurers may maintain that there is no such thing as diminished value, or offer a token amount calculated by an industry formula.

Companies like Collision Claim Associates inspect cars, review repair documents, offer sample letters that drivers can submit to insurers, and advise owners on what to say to an insurer. About 75 percent of his company’s customers are successful in getting paid for their diminished value claim, though not always for the amount they’re seeking, he says.

Those unable to find satisfaction on their own or using an appraisal company may have to turn to the courts. Many claims may fall underneath your state’s small-claims threshold, allowing you to present your own case.

But for most people, the cost of an attorney doesn’t make sense, Fisher says, either because they’re driving older cars that are “rolling total losses” and aren’t worth much, or the claim is so small that it will get lost in legal fees. A car worth less than $10,000 isn’t worth filing a claim on or hiring a lawyer for, he estimates.

An expensive or almost-new car, though, may be worth the effort.

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LearnVest Planning Services is a registered investment adviser and subsidiary of LearnVest, Inc. that provides financial plans for its clients. Information shown is for illustrative purposes only and is not intended as investment, legal or tax planning advice. Please consult a financial adviser, attorney or tax specialist for advice specific to your financial situation. The individuals interviewed in this piece are neither clients, employees nor affiliates of LearnVest Planning Services. LearnVest Planning Services and any third-parties listed, discussed, identified or otherwise appearing herein are separate and unaffiliated and are not responsible for each other’s products, services or policies.

  • ksgirl73

    The part I don’t understand is why you have to wait until the car is repaired. I just had an accident on Sunday in a car I only had 8 days. The other party was at fault, and admitted it to the police officer, and was cited. I’m already up to $7000 in damages not including any mechanical repairs on a car worth roughly $15000. Why would a company go through the process of repairing something that they may have to put out another $5000 in diminished value if they are told this before the car is repaired? Seems like they would be smarter to buy it off you or settle another way rather than stretching things out and having to pay more in the long run.

    • dmw

      this is my opinion which makes sense in my head… more likely the car will be totaled. if you add diminished value to a claim, it counts towards total repair. if your total bill is 9k and your car is worth 15k, you’re bordering on total loss on its own. if you add in 6k for diminished value, then you’re up to 15k and that’s the cost of the car, which would most definitely be total loss. I may be wrong but it makes sense to me…

      • dmw

        a short version is, if you file it before it’s repaired, they may total it out because it’s added to the repair. if you wait till after the repair, you get your car back plus the diminished value (if it’s not total loss to begin with)

        • ksgirl73

          They don’t add the diminished value to the repair. I did find out that threatening to sue the other driver for the diminished value does help get your car totaled though.

      • ksgirl73

        Apparently they can’t claim diminished value until after it’s repaired. By that point I wouldn’t have wanted it anyway. Luckily it was totaled.

    • JW

      Try this site I had great service from them in detail.

      • ksgirl73

        Too late, they ended up totaling the car.

  • Joseph Johnson

    We used
    They got us over $6,500 for our diminished value claim against Geico. We didn’t have to do any work, they took care of everything and we deposited the check!

  • JosephJohnson

    We used the claim experts at to help us with our diminished value claim. We got $4,500 and they did all the work!

  • Monsterlab

    I was recently in an accident and the other driver was at fault. She only has $10K in property damage coverage, which won’t be enough to cover the damage to my car. The car is brand new (not even a month old), and will likely not be totaled. Can I still file a diminished value claim, even though there isn’t any money left in her policy to pay out? My insurance company told me that I cannot file a diminished value claim with them. It would have to be through the other driver’s insurance.

    • ksgirl73

      I researched diminished value a lot last year when my 8 day old car was hit. It varies by state so it’s best to look up the laws for the state you had the accident in. Most insurance companies won’t touch it, but you can sue the other driver for the diminished value. After the car is repaired you would need to get a formal appraisal to determine what it is worth now after the accident. Then, depending on your state you may have a year to 18 months to file a claim for diminished value in small claims court. Luckily mine was totalled, but I had already picked up the forms from the courthouse and was ready to file if it hadn’t been totaled. Hope it works out for you.

    • me

      Hello Monsterlab,
      I am in the same exact predicament. The other driver was at fault and only has $10K in property damage coverage. My damages right now are $8K but may increase once car is taken apart. My insurance will not allow me to file a claim through them. Were you able to file diminished value claim?

      • Monsterlab

        Is your insurance covering the cost of repairs? I still haven’t gotten my car back yet (it’s been almost 3 months!), but since the at-fault party’s coverage was so low, I had my insurance pay for the repairs out of my collision policy, and they will seek reimbursement from the other party’s insurance. I contacted their insurance and let them know that I was going this route, and they sent me a check for $500 to cover my deductible.

        I contacted my insurance and let them know that I planned on filing a diminished value claim with the other party’s insurance, and that the payment for that would come out of whatever reimbursement they received from that $10,000 allotment. I then called the other driver’s insurance and told them the same thing. I was told that they will not issue any payment to my insurance company until after my diminished value claim has been settled. So basically, I’ll put in the claim and they’ll pay me out of the available $10k first, then whatever is left over will go to my insurance company. They will probably end up pursuing the driver personally for whatever is left over.

        This is all in theory, as I can’t do anything until I get the car back. Good luck!

        • Beth

          You should underinsured on your policy which there was a case in Indiana that won diminished value in the Supreme Court.
          I am going through similar BS, one week old van rear ended by a county car, her fault. I want the van replaced and we are stuck negotiating over week while my van sits. We are debating over $3K, trading in my van for a new one or them repairing. They have offered $900 for diminished value but it hasnt even been fixed yet. Looks like we both have a long road ahead.

  • Vu

    Question I just got into a car accident a week ago. Sideswipe on freeway guy told police he looked around saw no cars then a truck was about to merge into his lane so he went into mine and hit me.

    I called police right away after I got hit pictures stories exc..

    I got home called my insurance told them the story. Couple days later called my insurance again asked what my step is they told me to call their insurance which was allstate. I called them there was a claim all ready on that report and wanted me to come to one of their offices to have it checked.

    I went there couple days ago extimated damage was 3.3k had to repair pasenger door and fender buff out rims. I don’t know what my next step is I have been told if I want money then I would have to go to a small claims court or chiropractor is there anyway to get money from this event. I drive 2013 128i cost 48k after taxes just got it 5 months ago any help would be great.

    • OverTheTopGolf

      You may file a diminished value claim against Allstate. My advice is to make sure that you hire an independent appraiser who formulates his diminished value appraisal using Dealer quotes ONLY. Auto auction results and formulas using damage modifiers are a complete waste of time as is hiring one of the DV appraisers that advertises on the top and right side of a Google page when you look up “diminished value appraisers.” Also, check the BBB as there are a lot of unscrupulous appraisers out there. Don’t want to be a spammer so I won’t say who we hired but I will say that they are from Florida and they did a great job. Allstate will still try to lowball you but hang tough, make a complaint to the insurance dept. in your state, threaten legal action, etc. All part of the diminished value game.

  • Curly Sue

    Here is a pretty good Q & A from an independent appraisal company that handles diminished value claims.

    • the auto mediator

      You deserve the best advice and experts like JD Howard at Insurance Consumer Advocacy Network can tell you how and what your rights are. He is extremely knowledgable and wont take your money without great results and advise you the best course of action. I am not him and I do not get paid an incentive fee.