What is Diminished Value After a Car Accident?

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You can repair your vehicle after a car accident, but the crash still diminishes the value of your car. Even if you fix your vehicle perfectly, the fact remains that it isn’t the same as it was before. The reduction in value of your vehicle from the way it was before the accident is called diminished value.

You might wonder whether you can recover for the loss in the value of your vehicle. When you find yourself in a situation where the value of your vehicle is diminished after a crash, it’s important to speak to an experienced car accident attorney to review your options for recovery.


    What Is Diminished Value After a Car Accident?

    Diminished value is the loss in your vehicle’s value after a car accident. When an accident occurs, your vehicle suddenly has an accident history. You may be able to repair it entirely, or you may not ever be able to make the vehicle exactly the way it was before. Either way, the vehicle’s lower value, actual or perceived, as a result of the accident is called diminished value.

    What Are the Different Types of Diminished Value?

    There are three types of diminished value. They all relate to the decrease in a vehicle’s value after a car accident:

    Immediate diminished value – This is the decrease in a vehicle’s resale value from before a crash to after a crash. When a vehicle sustains damage in a collision, it’s immediately not worth what it was worth right before the accident. This decrease in value because of the damages is immediate diminished value. Even if the repairs are never done, the reduction in the value of the vehicle is its immediate diminished value.

    Inherent diminished value – A vehicle suffers some diminished value any time that it’s in an accident. You can fix the vehicle in the shop, but you never forget that the accident occurred. Someone who’s interested in buying the car may offer to pay a lower value just because the vehicle was in a crash. The fact that cars that have been in accidents aren’t worth as much as vehicles with a clean vehicle history is inherent diminished value.

    Repair-related diminished value – Sometimes, repairs don’t go as planned. It may be impossible to do a perfect repair, or repair technicians might make mistakes. They might use aftermarket parts. Any loss in value that relates to the quality of the repairs is a vehicle’s repair-related diminished value.

    What’s an Example of Inherent Diminished Value?

    You’re in a car accident. Your vehicle needs some repairs. You make the repairs, and your car seems more or less the same as it was before the accident.

    A year later, you want to sell your vehicle. You have a prospective buyer. When they come to inspect the vehicle, they ask you about the vehicle’s accident history. You tell them about the crash a year before. All of a sudden, they don’t want to buy the car.

    What just happened is diminished value. The buyer doesn’t think that the vehicle has the same value because of the accident. They’re basing their opinion solely on the fact that the car was in a crash.

    How Do I Make a Diminished Value Insurance Claim?

    If your insurance or the other driver’s insurance covers diminished value, you may be able to make a claim for the diminished value of your vehicle. You need to determine what insurance policy applies. If the other driver is at fault, their insurance may cover diminished value under their property damage coverage. If they don’t have insurance, your own uninsured or underinsured driver coverage may pay for the damage.

    Once you know what insurance policy applies, you need to notify the insurance company of your claim. To make a claim, you need to have some information about the diminished value of your vehicle. You can look at sources like Kelley Blue Book and Edmunds. You can ask a car dealer for the vehicle’s trade-in value. A professional car appraiser can even give you an expert opinion.

    Once you present your claim to the insurance company, they may agree to pay you the value of your claim, they may deny your claim, or they may try to negotiate a lower amount. If they don’t pay you an amount that you agree with, you can take your case to formal legal proceedings. The case proceeds like any other case that occurs when a person wants an insurance company to honor a policy fairly.

    Do Nevada Courts Recognize Diminished Value?

    Nevada courts recognize diminished value. They talk about compensation for diminished value in several different ways:

    Nevada Pattern Jury Instruction 10.09 tells a jury how to award damages in a case of diminished value. The court instructs the jury that if repairs don’t fully restore the value of the damaged property, the jury should award the victim the difference between fair market value and the value post repair. The jury should also award the cost of repairs.

    In the Dugan v. Gotsopoulos case, the Supreme Court of Nevada said that the court should allow a victim to present evidence of a vehicle’s value before and after an accident. In the Dugan case, the victim couldn’t pay to fix the vehicle’s damage. Eventually, the victim scrapped the vehicle. The court said that the victim should even be able to admit Kelley Blue Book information to prove the vehicle’s value. The court determined that Nevada Revised Statute 51.245 says that Kelley Blue Book is admissible as a generally accepted compilation of information and values.

    Finally, the courts recognize diminished value in other areas of law. In contract law, an aggrieved party of a breach of contract can argue that they suffered losses because the breach of contract reduced the value of their property. The chances are high that the court will recognize the diminished value as a legitimate category of damages after a vehicle accident.

    How Can a Car Accident Attorney Help?

    If you’re in a vehicle crash, you may be able to recover for the reduced value of your vehicle. You will need to work with a car accident attorney to prove the value of your vehicle both before and after the accident.

    You will also need to bring the claim to the insurance company and possibly to the courts. An attorney has the necessary experience with diminished value to ensure you get the maximum amount for the reduction in your vehicles value.

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