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Is My Car Eligible for a Diminished Value Claim After My Crash?

Updated: Feb 23, 2023

Diminished Value is a term used to describe a piece of property that loses a portion of its value, due to damage. Diminished Value claims are normal in car wreck cases. However, it can also be applied to additional valuable items, such as artwork or expensive jewelry.

What is Diminished Value Exactly?

In auto accident cases, the Diminished Value of a vehicle occurs after an unexpected and usually negative event. A vehicle is damaged and then loses value since it is not repairable to its pre-accident state. For example, an automobile could be worth $40,000, resale value. However, after this vehicle is damaged in a car wreck, the resale value goes down to $30,000 - even if the vehicle is repaired as best as possible. In addition, the particular vehicle is now added to a “damage history report.”

Diminished Value should not be misunderstood with depreciation. Depreciation is an anticipated or foreseeable loss in value over a period of time.

How Will Diminished Value Affect Me -- The Vehicle Owner?

When the accident or negative occurrence is not the vehicle owner’s fault, then the vehicle owner is likely able to file a “diminished value” claim against the at-fault party’s automobile insurance. Such a claim allows the vehicle’s owner to obtain the difference between the pre-accident value, and the value after repairs. Please note that if the automobile is a total loss, a diminished value claim will not apply. In Alabama, an automobile owner can also make a diminished value claim against their own insurance policy.

How Will Diminished Value Affect Me -- The Consumer?

Generally, courts have held that as a matter of law a vehicle cannot be returned to its pre-collision value, as the majority of automobile shoppers would not be interested in buying a vehicle that has been involved in a crash.

To give an example of how Diminished Value affects those wanting to purchase a vehicle: “Customer A goes into a car dealership’s location and views two vehicles that appear to be the same, with the exact same price tags. Customer A asks the car salesman for a history (i.e., CarFax Report) for both vehicles. The first report revealed one owner and no accidents. The second report found the warning, “severe damage reported.” During decision time, Customer A is likely to not buy the second vehicle, as it was damaged and is worth a lesser amount in value.”

Inevitably, gaining loss of value is extremely difficult and takes considerable time. This can be made worse if you know very little about how to handle Diminished Value claims.

More Information

Handling and filing a claim for Diminished Value is an extremely complicated and long process. Let the Bryant Law Firm, LLC, help! If you need assistance with a Diminished Value claim or auto-accident case, contact us today (205) 267-8561.


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