In this guide
What diminished value is
After a crash, two losses can hit your car: the repair, and the drop in market value that comes with an accident history. A property damage claim covers the first. The second — diminished value — usually has to be claimed, documented and negotiated. An illustrative example: a car worth $28,000 before the crash needs $7,800 in repairs and afterward is worth $24,500. The repair bill is paid separately; the diminished value claim is the $3,500 difference.
The rules, state by state (verified so far)
| State | Against the at-fault driver’s insurer | Against your own policy |
|---|---|---|
| Texas | The at-fault driver’s insurer may have to pay lost market value, even after a complete repair. | Your own insurer generally doesn’t owe it after a complete repair — except possibly under uninsured/underinsured motorist coverage. (TDI Bulletin B-0027-00 (2000)) |
| Georgia | Not addressed by the decision below, which concerns what your own insurer owes. | Georgia’s Supreme Court has held that an insurer’s obligation to pay for a loss “includes paying for any lost value,” subject to the policy’s language. (Royal Capital Dev. v. Md. Cas. (Ga. 2012), quoting State Farm v. Mabry (Ga. 2001)) |
| North Carolina | Recoverable. If you and the insurer disagree by more than $2,000 or 25% of the pre-accident retail value (whichever is less), either side can demand appraisal. | Not addressed by this statute; your policy’s terms and appraisal clause apply. (G.S. 20-279.21(d1)) |
| Michigan | A claim against the at-fault driver for damage to your car — which would include lost value — is limited to $3,000 under the “mini-tort” rule. | Your own collision coverage pays for repairs under its terms. (MCL 500.3135(3)(e)) |
We’re adding states as we verify them against each state’s statutes, regulators and courts. Texas’s position is from a 2000 bulletin of its insurance department, the most recent statement we found.
How to make the claim
- Finish the repair at a shop you trust, and keep the final invoice and photos of the damage.
- Get evidence of both values: the pre-accident value from pricing guides and listings for the same car, and the post-repair value from an independent appraisal or written dealer trade-in offers that mention the accident.
- Send a written demand to the at-fault driver’s insurer with the appraisal and the number, as part of your property damage claim.
- Negotiate, and use your state’s appraisal process if there is one — North Carolina has a statutory one for large disagreements.
- Watch the deadline for property damage claims in the claim deadline calculator.
What moves the number
- The car’s value: the same percentage loss is more dollars on a more valuable car.
- The vehicle history report: an accident that shows up on a history report is what buyers react to.
- Repair quality: a poor repair is a separate problem — the shop or the insurer may owe a proper repair first.
Frequently asked questions
What is a diminished value claim?
It’s a claim for the value your car lost because it now has an accident history, even after a proper repair. A buyer will usually pay less for a car that’s been in a crash, and the difference between its value before the accident and after the repair is the diminished value.
How do you calculate diminished value?
Subtract the car’s value after the repair from its value just before the accident. For example, a car worth $28,000 before a crash and $24,500 after repair has lost $3,500. The hard part is proving both numbers — an independent appraisal and written dealer offers are the usual evidence.
Can I claim diminished value from my own insurance?
Usually it’s claimed from the at-fault driver’s insurer. Against your own policy it depends on the state and the policy: Texas’s insurance department says your insurer generally doesn’t owe it after a complete repair, except possibly under uninsured/underinsured motorist coverage, while Georgia’s Supreme Court has held an insurer’s obligation to pay for a loss includes lost value, subject to the policy’s language.
Is there a time limit for a diminished value claim?
It’s part of the property damage claim, so the deadline to sue for property damage applies — 3 years in California, for example — and it’s best to make the claim once the repair is done, while the records are fresh. The claim deadline calculator shows property damage deadlines for the 10 largest states.
Do I need a diminished value appraisal?
It helps a lot. The insurer will have its own number, and an independent appraisal from someone who values repaired vehicles gives you evidence for yours. In North Carolina, if you and the insurer are far apart, either side can demand a formal appraisal process.
Reviewed by
Morgan Hale, Editor. Writes about the financial side of injury claims — fees, liens, timelines and state rules — and checks every page against its sources before it’s published. Not a lawyer; “Morgan Hale” is a pen name. Editorial policy · How we calculate
Sources
- Commissioner’s Bulletin B-0027-00 — Payment of diminished value to policyholders (Apr. 6, 2000) (Texas Department of Insurance)
- Royal Capital Development LLC v. Maryland Casualty Co., No. S12Q0209 (Ga. May 29, 2012) — applying State Farm v. Mabry (FindLaw (Supreme Court of Georgia opinion))
- N.C. Gen. Stat. § 20-279.21(d1) — Appraisal of disputed diminution in value (FindLaw (North Carolina General Statutes))
- Michigan Compiled Laws § 500.3135 — Tort liability limits under no-fault (noneconomic loss threshold; up to $3,000 vehicle damage) (FindLaw (Michigan Insurance Code))
Not legal or financial advice. InjuryMath is not a law firm and does not sell or broker funding. This page gives general information based on the sources listed; your contracts and your state’s law control. For advice about your situation, talk to a licensed attorney in your state.