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Are you leaving money on the table?

Diminishment in Value

Having been an insurance claims adjuster for nearly two decades before becoming an attorney, I often wondered why more claimants didn’t make claims for the diminishment in value suffered by their vehicles following auto collisions. The answer is simple, most people have no idea what this claim is and what may be required in order to pursue such a claim. Mark my words, the insurance company of the at-fault driver is not going to tip you off to this potential recovery. As a result, money is regularly “left on the table.”

Imagine you’re shopping for a used vehicle. You search vehicles “near me” and you find two identical vehicles you like. These vehicles are mirror images of one another – same color, miles, interior, upgrades, etc. Because you’re a diligent consumer, you ask each owner for one of those vehicle history reports (i.e., Carfax) that are advertised on television. Upon review of the two reports, you learn that one of the two identical vehicles has been in an automobile collision and you immediately elect to purchase the vehicle that was not involved in a collision. If the seller is going to sell the vehicle that was involved a collision, he is going to have to sell it for less than the identical non-collision vehicle – THIS IS DIMINISHMENT IN VALUE. The owner of the vehicle involved in a collision suffered a reduction in the market value of his vehicle because his car is now worth less than an identical vehicle that has not suffered a collision. The diminishment in value is almost entirely unrelated to the quality of the repairs performed after the collision.

The term “diminished value”, or “diminishment in value”, can be confusing and a lot to chew on. To make matters worse, there are three types of diminished value:

1. Immediate Diminished Value

The difference in resale value of a vehicle immediately before damage has occurred and immediately after damage has occurred, prior to any repairs being performed.

2. Inherent Diminished Value

This is the loss in value of a vehicle that remains after it is completely and competently repaired. This is a loss in market value that results from the simple fact that the vehicle has been in a collision, sometimes referred to as “stigma damage.” As mentioned above, if two identical vehicles are available for sale, the one, which hasn’t been involved in a collision, is preferable to the one that has been damaged and repaired.

3. Repair-Related Diminished Value

This refers to the additional loss in value to a vehicle which results from improper, incomplete, or poorly performed repairs. This could include minor cosmetic damages that remain after a repair.

Since online vehicle history reports have become so easily accessible, you can be assured that a private buyer of your personal vehicle or the dealer considering your vehicle as a trade-in will check one of these reports before making you an offer.

Don’t get shortchanged by the insurance company. If you’ve been injured in an automobile collision and your vehicle was damaged due to the negligence of another driver, call POUNDSTONE SCOTTEN, PLLC for a free consultation. In most cases, we can assist you with your diminishment in value claim so that you don’t get taken by the insurance company and LEAVE MONEY ON THE TABLE.


The information provided in this website is meant only as a general description of the current laws as of the date of the writing. It is not meant to be an exhaustive discussion of all the nuances of the law and is intended to be only an overview. Many issues may appear simpler than they are, and an individual should always contact an attorney to obtain a complete, accurate interpretation of the law given the individual’s particular circumstances. POUNDSTONE SCOTTEN, PLLC makes no representations as to how the law would affect a particular situation and intends only to illustrate areas of concern and give general information.

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