The Diminished Value of a Car After an Accident

by Caryn Kelly

A guy runs a red light and slams into your car and now its value has just been diminished by several thousand dollars. Faced with an insurance claim, you wonder whether you can collect for diminished value. Your chances are slim, but it is possible to pursue a claim for diminished value in a few states.


Your car's value drops after it's been in an accident, even if it's been repaired by a highly reputable auto body shop. The difference in dollar amount between what your car was worth before the wreck and it's value in its repaired condition is known as diminished value--or diminution of value.


If an insurance company refuses to authorize necessary repairs recommended by a body shop, a car diminishes in value because of "claim-related" reasons. "Repair-related" causes result when a car is repaired by an inferior mechanic or when substandard parts are used.


Insurance companies will pay for damage repairs after an accident, but in most states they don't have to pay a penny for diminished value claims. Some states examine who's at fault before they'll even consider making an insurer pay. In other states, the insurer is mandated to pay no matter who was at fault.

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  • photo_camera car crash image by dawn from