Car accident? Does the Insurance Company Owe You for Diminished Value? Most of us have been involved in an auto accident at some point. We have taken our vehicle to a body shop, gotten an estimate that was then sent to the insurance company, who then approves and pays for the vehicle to be repaired. Most people think that’s the only obligation the insurance company has. However, in certain states the insurance policy allows for payment of diminished value.
Diminished value is the difference between a vehicle’s market value prior to a collision and the value after. When you are involved in a collision and your vehicle is repaired, it may appear that the vehicle has been repaired to its preloss condition. While that may be true from a physical standpoint, the collision has likely severely affected the vehicle’s value. Unfortunately, most policyholders don’t realize this until they attempt to trade-in or sell their vehicle and are offered sometimes thousands less than they anticipated due to the vehicle being involved in a prior collision. This is because when a collision is