“Diminished Value” or “diminution in value” is the difference between what your car was worth before it was damaged in an accident and the market value after it is damaged and repaired. Most vehicles lose some value after being involved in a crash – even with high-quality repairs and parts. This is because buyers simply prefer to purchase vehicles that have not been involved in a crash resulting in less demand and therefore a lower market value of your vehicle after a crash. This is typically described as “inherent diminished value.” You may also have diminished value of your vehicle if the repairs are shoddy, incomplete, or use low-quality parts. This is usually referred to as “repair-related” diminished value. There are very few exceptions where a vehicle does not lose value after being involved in a crash. But, if your car is particularly old, repairs with new parts may actually increase the value of your vehicle.
There are several factors to consider in pursuing a claim for diminished value of your vehicle. The first, and biggest, factor is who is at fault for the crash that damaged your car. If you are at fault for the crash, you probably can’t recover the diminished value of your car. Even if you have collision coverage on your auto policy, most insurance policies will not cover diminished value if you cause a crash that damages your vehicle. If someone else caused the crash, you have a claim for diminished value against the at-fault driver. This is typically covered under the property damage liability portion of the at-fault driver’s insurance coverage. That’s the same coverage that pays for repairs to your vehicle when another driver causes the crash. Property damage liability coverage of at least $10,000.00 is required on auto policies under Florida law.
To make a claim for diminished value of your car, you have to own the vehicle (people who lease their car aren’t able to make the claim) and it’s your responsibility to prove that your repaired vehicle is worth less than it would have been if it had not been in a crash. This will usually require an appraisal of your vehicle’s market value with crash and crash-related repairs as part of its history, compared to the market value had the crash never occurred. You may also be able to draw on the knowledge and experience of experts in the automotive field like dealerships or reputable repair shops. Although diminished value is negotiable and varies based on the age, condition, and accident history of the vehicle, insurance companies frequently attempt to limit the claim to 10% of the vehicle’s value. Because of this, a diminished value claim is something you should consider pursuing if your vehicle is relatively new with low mileage, high in value, and has a clean accident history. The deadline to make a claim is four years from the date of crash, but if you have a diminished value claim, you should never delay in presenting it to the insurance company after a crash.