Your Car Is Worth Less After an Accident—Even If It’s Perfectly Repaired
After a car accident, most car owners focus on getting their vehicle fixed. But what many people do not realize is that even a properly repaired vehicle loses market value the moment an accident history appears on a report like Carfax or AutoCheck.
Two identical vehicles with the same mileage, condition, and features will not sell for the same price if one has been in a collision. The one with a recorded accident has a lower vehicle’s resale and lower car’s market value, even when the vehicle repairs were done correctly and no damage is visible.
That loss in vehicle’s value is called diminished value. It is also known as a diminished value claim or value claim in an auto insurance claim. When an accident occurs and another at fault driver causes the damage, their insurance company or the at fault driver’s insurer may be required to pay for that lost value, not just the repair costs.
This applies even when the car looks perfect and was properly repaired using quality parts. The simple fact that the accident history exists is enough to create lost value in the vehicle.
What Is Diminished Value?
Diminished value is the difference between your pre accident value and what your repaired vehicle is worth after the repair process is complete. Even when a vehicle is fixed, its vehicle’s market and sales value drop because buyers see the accident history.
Imagine two identical trucks with the same car’s mileage, year, and condition. One has never been in a crash. The other was in a car accident and repaired. The clean one will always have a higher market value and higher resale value. That gap between the two is your diminished value and the basis for a diminished value claim.
There are three main types of diminished value that insurance companies recognize.
Inherent Diminished Value
Inherent diminished value or inherent diminished is the automatic loss in vehicle’s value simply because the accident occurs and becomes part of the accident history. Even with perfect repairs, the car’s market value drops. This is the most common type used in a value claim.
Repair-Related Diminished Value
Repair related diminished or repair related diminished value applies when vehicle repairs are not done to factory standards. Low quality repairs, aftermarket parts, or poor paint work can further reduce a vehicle’s market value and resale value.
Immediate Diminished Value
Immediate diminished value is the loss in value between the moment the auto accident happens and before repairs begin. While it exists, most insurance companies focus on final diminished value after the repaired vehicle is returned.
How Much Is Your Diminished Value Claim Worth?
The amount of a diminished value claim can vary widely depending on several factors that affect a vehicle’s value and its market value after a car accident.
Some of the most important factors include:
- Car’s mileage and age. Newer vehicles with lower mileage usually suffer higher lost value.
- Pre accident condition. A well maintained car with a strong pre accident value loses more than one that was already worn.
- Accident damage and repair costs. More serious or severe structural damage typically leads to greater vehicle’s diminished value.
- Vehicle type. Trucks and luxury models often have a higher resale value drop.
- Local vehicle’s market and car’s market trends.
In most cases, a diminished value payout falls somewhere between ten and twenty five percent of the pre accident value, but the number ranging can be much higher or lower depending on the vehicle’s resale potential and the extent of the damage.
For example, if a truck had a pre accident value of thirty five thousand dollars and suffered a fifteen percent vehicle’s diminished loss, the value claim would be about five thousand two hundred fifty dollars in addition to normal property damage and vehicle repairs.
That amount represents the lost value created by the accident, not the cost of fixing the car.
Who Pays Diminished Value Claims?
A diminished value claim is filed against the at fault driver and the at fault driver’s insurer, not your own insurance company. When another other driver causes the car accident, their car insurance companies and insurance provider are responsible for paying the property damage, including the vehicle’s diminished value.
In a standard auto insurance claim, the insurance company pay process usually covers:
- Vehicle repairs
- Rental car expenses
- Medical expenses
- Your diminished value payout
Because most insurance companies do not automatically explain how diminished value works, many accident victims never realize they can seek compensation for the lost value. You must actively file a diminished value or claim diminished value as part of the claim filing.
If you were the at fault driver, your own car insurance typically will not cover diminished value. In cases involving an uninsured driver or uninsured motorist, different rules may apply depending on your insurance policy.
State laws also matter. In states like Idaho and Montana, diminished value claims are recognized and part of the insurance company’s process when a third party is responsible.
How to File a Diminished Value Claim
Filing a diminished value claim is a formal part of the insurance claim and auto insurance claim process. It must be done after the repair process is finished so the vehicle’s value and adjusted value can be measured correctly.
Step 1: Complete the Repairs
You must show that even when a repaired vehicle is properly repaired, it still has lost value. This is why you need to wait until all vehicle repairs are done and the car is back in your possession.
Step 2: Get an Appraisal
To calculate diminished value, most people need a certified vehicle appraiser or other form of accurate appraisal. This helps establish the claim worth based on the vehicle’s market, pre accident value, car’s market, and the accident history.
Some options include:
- A professional diminished value appraisal
- Dealer offers showing trade in or resale value with and without accident history
- Market comparisons from similar listings
Step 3: Gather Documentation
To support a successful claim, you should collect:
- Accident and property damage reports
- The original repair estimates and final invoices
- Photos showing accident damage
- Proof of pre accident value
- The appraisal showing vehicle’s diminished and final diminished value
- A vehicle history report
Step 4: Submit the Claim
You will contact the at fault driver’s insurer and submit your claim filing for diminished value. This is separate from a standard auto claim for repairs. Include a clear dollar amount and explain the lost value of the vehicle.
Step 5: Negotiate the Settlement
An insurance adjuster may dispute the amount or offer a lower value claim. You may need to provide more documentation, ask for a supervisor, or show how the mileage multiplier or mileage multiplier based formulas were used to calculate diminished value.
In larger or disputed cases, some injured party or accident victims choose to work with an experienced car accident attorney or car accident lawyer to help navigate the process.
How Vision Collision Can Help
Vision Collision does not file a diminished value claim on your behalf, but our team plays an important role in helping car owners support a successful claim with the right details and documentation.
Detailed Repair Documentation
Our repair and vehicle repairs records show exactly what was damaged, what parts were replaced, and how the repair process was completed. These records help the insurance adjuster, your insurance company, or a certified vehicle appraiser confirm the repair related diminished or repair related diminished value tied to the accident damage.
Before and After Photos
We take and keep photos that show the condition of the vehicle before and after the accident. These images help prove the severity of the car accident and support the claim diminished value when the insurance company’s process is reviewed.
Proper Repairs
A properly repaired car matters when pursuing a diminished value claim. High quality vehicle repairs show that the lost value is not due to low quality repairs or aftermarket parts, but rather the accident history and how it affects the vehicle’s market and vehicle’s resale.
If you are working on a value claim and need documentation, you can contact our shop and we will provide the records needed to support your insurance claim.
Frequently Asked Questions
How long do I have to file a diminished value claim? Deadlines vary by state. In Idaho, you generally have 2 years from the accident date. In Montana, it’s typically 3 years. Don’t wait—file as soon as your repairs are complete.
Will filing a diminished value claim raise my insurance rates? No. You’re filing against the other driver’s insurance, not your own. It shouldn’t affect your rates.
What if the insurance company denies my claim? Denials are common. Request a written explanation, counter with your documentation, and escalate if needed. Small claims court is an option for amounts within the limit (typically $5,000-$12,000 depending on the state).
Do I need a lawyer? For most diminished value claims, no. The process is straightforward enough to handle yourself. However, if your claim is large or the insurance company won’t negotiate, consulting an attorney may be worthwhile.
Can I claim diminished value on a leased vehicle? This gets complicated. The leasing company technically owns the vehicle, so they may have a claim—but you may be responsible for the diminished value at lease end. Check your lease agreement and consult with the leasing company.
The Bottom Line
When an other driver causes a car accident, the vehicle’s resale and car’s market value are reduced, even after the vehicle repairs are complete. That lost value is real and it affects the vehicle’s value, which is why a diminished value claim exists.
By documenting the accident damage, understanding the repair process, and working through the insurance company’s process, accident victims can seek compensation for the vehicle’s diminished and final diminished value. Filing a value claim helps ensure the insurance company pay includes more than just repair costs and property damage.
Getting a vehicle properly repaired, gathering the right records, and submitting a successful claim allows you to recover what your car lost in the vehicle post accident period.
Need Collision Repair in Idaho Falls, Pocatello, or Missoula?
We’ll get your vehicle back to pre-accident condition and provide the documentation you need. Get a free estimate or call your nearest location.
