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What is Diminished Value?

Diminished Value (DV) is the loss in market value of a motor vehicle from its pre-wreck fair market value due to the vehicle being in a wreck and requiring cosmetic and/or mechanical repairs. Diminished Value may be attributed and applied to various Motor Vehicle Claims. 

Who's Entitled to Diminished Value?

Should your damages be the result of another's negligence, you may be eligible to collect your Diminished Loss in Vehicle Value from the at-fault party or their insurance carrier, if applicable. Diminished Value Claims are recognized by most states.

"An insurer also may be obligated to pay a third party claimant for any loss of market value of the claimant's automobile, regardless of the completeness of the repair, in a liability claim that the third party claimant under the uninsured/under-insured motorist coverage provision of the policy, for any loss of market value of the first party claimant's automobile, regardless of the completeness of the repair." April 6, 2000: Commissioner's Bulletin # B-0027-00 by David Durden, Texas Department of Insurance

"The difference between the value of the chattel (personal property) before the harm and the value after the harm or, at the plaintiff's election, the reasonable cost of repair or restoration where feasible, with due allowance for any difference between the original value and the value after repairs, and the loss of use." November 4, 1997: Legal Memorandum by John R. Dunphy, Florida Department of Insurance

"The difference in the dollar amount of what your car would have sold for without damage, and the amount it will likely sell for with the repaired damage." "Fact Sheet" prepared by the Washington State Insurance Commissioner

"Inherent Diminished Value" is based on public awareness that even if a damaged vehicle is repaired to the best of one's human ability, it will still exhibit remaining deficiencies and inconsistencies from the pre-loss condition of the vehicle prior to the wreck. These deficiencies include, but are not limited to:  

• Weaker structural components that appear cosmetically sound.

• Impossible to duplicate factory seams.

• Telltale signs of repair, such as paint missing off the head of bolts etc.

• The unavailability of some factory decals, and markings (e.g. VIN labels)

• Undiscovered kinetic damage throughout the vehicle.

• The increased likelihood of a mechanical failure due to direct and/or kinetic damage.

• The effect that the repair will have on the future deployment of the SRS (air-bag) system.

• The infeasibility of duplication immersion and/or robotic applied rust-proofing techniques.

• The loss of factory warranties & eligibility of Certified Pre-Owned vehicle warranty programs.

• Wreck Damage and/or Collision Damage noted on CarFax and Auto Check Reports. 

Hire an Expert, Call Vehicle Value Experts! "No One Else Comes Close"

Diminished Value

Diminished Value is defined as that portion of a damaged vehicle's pre-Loss Value that has Not been restored through the repair process. There are actually three (3) basic types of Diminished Value . . .

1. Immediate Diminished Value is the difference in resale value of a vehicle immediately before damage has occurred and immediately after damage has occurred (prior to repair). Most jurisdictions (courts) will use this standard as the primary measure of damage when courts are employed to seek reimbursement for damage from a negligent party. As courts are rarely the chosen venue for recovery of property damage, the standard of “Immediate Diminished Value” is rarely employed in resolving Property Damage claims ...
2. Inherent Diminished Value assumes optimal repair quality has been achieved and is defined as the amount by which the resale value of a repaired vehicle has been reduced simply because the subject vehicle now has a significant damage history. “Inherent Diminished Value” is the most widely recognized and accepted form of Diminished Value. It is also the basis upon which any supplemental form of Diminished Value would be added. A common “Supplemental” form of Diminished Value is “Repair Related Diminished Value” ...
3. Repair Related Diminished Value includes any additional amounts by which the resale value of a subject vehicle may be further reduced because of less-than-optimal repairs. This could include anything from minor cosmetic imperfections to major structural defects.

Posted By Mr. J.D. Howard

StateFarm Insurance 2014 BMW 428i Turbo Convertible Diminished Value Claim

Early 2015 I was contacted by a potiential client whom told me his wife was struck by another vehicle while driving down the road and the other party was ticketed and at fault. The potiential client informed me the party at fault had StateFarm Insurance and they had infact paid to have the BMW repaired and put back to as near factory specs as humanly possible. During our original conversation he told me StateFarm at this time was not agreeing to pay The Diminished Value that was infact Owed! The Original Claim StateFarm wrote on the Damaged Vehicle was $3,502.74. Upon Autonation beginning work on the car an additional supplement was later written and approved by StateFarm for $5,743.29. Autonation as noted on the Final Body Shop Repair Order used all O.E.M. Replacement Parts.

Documents supplied to me show the Client had purchased the BMW New in July of 2014 and the vehicle had 3 miles on it. The Accident occurred on October 3rd 2014 and the vehicle at this time had an estimated 2,408 miles. At the early part of my evaluation on January 19th 2015 it was noted CarFax reflected Minor Wreck Damage on its report in reference to the BMW that is the subject of this post.

Upon evaluation of the facts presented to me and a careful review of the documents pertaining to the claim, it is my Professional Opinion there is No Doubt the above referenced client was Due a Diminished Value Settlement from StateFarm for his Loss in Fair Market Value to his BMW after The Wreck!