The short version
- Diminished value is the drop in a vehicle’s market value after an accident.
- Whether and how it is paid depends on the state and whose policy is involved.
- Ask your insurer how they handle it before you settle.
The idea
Buyers often prefer a car with no accident history. Even when repairs are done well, a record of damage can reduce what the car might sell for.
Who may pay
In some states a driver who is not at fault can claim it from the at-fault driver’s insurer. Your own policy often does not include it. Rules vary a lot.
How it is estimated
- Age and mileage of the vehicle.
- Extent and location of the damage.
- Whether a vehicle history report shows the claim.
Questions to ask
Ask whether your state allows it, what documentation is needed, and whether the final release you sign closes the possibility.
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