# Diminished value

> Diminished value is the drop in a car's market value after it is damaged and repaired. When you can claim it, and how the loss is usually shown.

Canonical page: https://accidentclaimfacts.com/glossary/diminished-value/  
Last reviewed: October 29, 2026 by the Accident Claim Facts editorial team  
General information, not legal advice. Talk to a licensed attorney in your state.

## Quick answer

Diminished value is the drop in a car's market value after it has been damaged and repaired. Washington's insurance regulator defines it as the difference between your car's market value before the accident and its market value after repairs. Even after a good repair, buyers often pay less for a car with a crash history.

## In a car accident claim

Whether you can claim diminished value depends on whose insurance is paying and on your state. Maryland's insurance regulator, for example, says diminished value is not covered under your own policy, but a valid part of a liability claim against an at-fault driver. Where it is allowed, the claim is usually made against the at-fault driver's insurer as part of a third party claim, on top of the repair bill.

The loss has to be shown, not just stated. People commonly use a written appraisal of the car's value before the crash and after the repair, dealer trade-in quotes, and the vehicle history report that buyers will see. Insurers may push back on how much value was lost, so the [insurance adjuster](https://accidentclaimfacts.com/claim-process/insurance-adjuster/) will want documents. Our guide to [property damage and diminished value](https://accidentclaimfacts.com/money/property-damage-and-diminished-value/) covers the full car claim, including repairs and rentals.

## Example

> **Example:** A two-year-old SUV is rear-ended and repaired to factory standards. When the owner asks a dealer about a trade-in, the offer is lower because the history report shows the crash. The owner gets an independent appraisal of the value before and after and sends it to the at-fault driver's insurer as a diminished value claim.

## Related terms

- [Actual cash value](https://accidentclaimfacts.com/glossary/actual-cash-value/)
- [Total loss](https://accidentclaimfacts.com/glossary/total-loss/)
- [Loss of use](https://accidentclaimfacts.com/glossary/loss-of-use/)
- [Third-party claim](https://accidentclaimfacts.com/glossary/third-party-claim/)

## FAQ

### Does my own insurance pay for diminished value?

Often not. In Maryland, for example, it is not covered under your own policy. The rules depend on your state and your policy wording, so many people ask their insurer or state insurance department.

### How do you prove diminished value?

Usually with evidence from the market: an appraisal comparing the car's value before the crash and after the repair, dealer quotes and the repair records. The stronger the documents, the easier the loss is to show.

## Sources

- [Washington State Office of the Insurance Commissioner, Filing an auto insurance claim](https://www.insurance.wa.gov/insurance-resources/auto-insurance/auto-insurance-claims/filing-auto-insurance-claim) — definition of diminished value
- [Maryland Insurance Administration, A Consumer Guide to Auto Insurance](https://insurance.maryland.gov/Consumer/Documents/publications/autoinsuranceguide.pdf) — diminished value in liability claims and under your own policy