General information, not legal advice. Talk to a licensed attorney in your state.

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Glossary

Diminished value

The drop in a car's market value after it has been damaged and repaired, because buyers often pay less for a car with a crash history.

Last reviewed By the Editorial team 2 min read

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. A claim you make against the other driver's insurance because their driver caused your losses. Glossary, 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 will want documents. Our guide to property damage and diminished value covers the full car claim, including repairs and rentals.

Example#

Questions people ask

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

  1. Washington State Office of the Insurance Commissioner, Filing an auto insurance claim — definition of diminished value
  2. Maryland Insurance Administration, A Consumer Guide to Auto Insurance — diminished value in liability claims and under your own policy

Last reviewed October 29, 2026 by the Accident Claim Facts editorial team. Found an error? Tell us.

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