No one likes getting involved in a car accident, as it is very stressful and costs a lot to repair your vehicle back to its previous condition. But what if you could recover the losses after the vehicle is repaired? That can save a lot of money for car owners in all states. Diminished value claims help car owners by giving them an opportunity to recoup the lost market value of their vehicle. However, from Alabama to Wyoming, there are different rules for filing a diminished value claim by state.
After a car is damaged due to an accident, its market value decreases from its value before the accident. This difference between the pre- and post-accident market value of the car is considered the total loss market value. If the market value of your vehicle was $33,000 before the accident and dropped to $28,000, then $5,000 is the diminished value.
There are 3 types of diminished market value one should know about:
It is the difference between your car's market value immediately before and after the accident. If the vehicle was worth $33,000 before the accident and dropped to $28,000 immediately after the accident, the immediate diminished value is $5,000.
Inherent diminished value refers to the difference between a car’s market value before an accident and after repair. If your vehicle was worth $33,000 before the accident and after the repair, its market value is $31,000; the remaining $2,000 is the inherent diminished value of your car.
Sometimes, a car is not repaired with original parts, which can further lower its market value. This decrease is the repair-related diminished value. Suppose your car was worth $28,000 immediately after the accident, but due to being poorly repaired, its value decreases to $25,000; then $3,000 is the repair-related diminished value of your car.
Here, we discuss the diminished value claim laws of different states and the statute of limitations (the deadline to file a claim from the date of the accident).
The Alabama state government allows only a third-party, not a first-party diminished value claim. So, the at-fault party’s insurance company is liable to pay for your car repairs.
Statute of Limitations: 2 years
In Alaska, you can file a third-party diminished value claim and recover the losses from the at-fault party’s insurance company.
Statute of Limitations: 2 years
As per the Arizona government, a diminished value claim is valid in third-party cases. You can recover the losses only from the at-fault driver, not from your insurance company.
Statute of Limitations: 2 years
Arkansas allows third-party diminished value claims; however, if the at-fault driver is uninsured or underinsured, you can recover the losses under your insurance coverage, too.
Statute of Limitations: 3 years
In California, the diminished value can be recovered through the at-fault driver’s insurance company and your insurance coverage.
Statute of Limitations: 3 years
You can file a claim if the accident is caused by another driver, so only third-party claims are allowed in Colorado.
Statute of Limitations: 2 years
Only third-party claims are allowed in Connecticut, and you cannot file a claim under your motorist insurance. One can file a claim even after the car is repaired.
Statute of Limitations: 2 years
You cannot make the diminished value claim under your insurance, as Delaware only allows third-party claims, and you can seek compensation even after your car is repaired.
Statute of Limitations: 2 years
In the District of Columbia, you can file a diminished value claim only against the at-fault party’s insurance company. So, make sure the at-fault driver has adequate insurance coverage to cover your claim.
Statute of Limitations: 3 years
You can file a third-party diminished value claim in Florida; however, there are no specific guidelines, making the process more complex.
Statute of Limitations: 4 years
You can file both third-party and first-party types of diminished value claims in Georgia. If your car is financed, you are still eligible to file a claim in Georgia.
Statute of Limitations: 4 years
In Hawaii, you can file a diminished value claim as long as you are not at fault. The at-fault driver’s insurance company is liable to pay for the losses. If the claim is less than $5,000, it can be filed in small claims court.
Statute of Limitations: 2 years
Diminished value claims are only applicable in third-party cases, and you can not file a claim under your motorist insurance.
Statute of Limitations: 3 years
In Illinois, you can file diminished value claims against the at-fault driver’s insurance company. However, you can file the claim against your own company, too, if the at-fault driver is uninsured or underinsured.
Statute of Limitations: 5 years
Diminished value is recoverable with third-party and first-party claims, and minimum liability coverage is required.
Statute of Limitations: 2 years
In Iowa, you cannot recover diminished value under your motorist insurance, because third-party insurance claims are allowed. So, you can only file a claim when another driver is at fault for the accident.
Statute of Limitations: 5 years
In Kansas, a diminished value claim is only possible against the at-fault driver’s insurance company and not yours.
Statute of Limitations: 2 years
Kentucky allows diminished value recovery in third-party cases. If you are at fault for the accident, filing a claim is not allowed.
Statute of Limitations: 2 years
Louisiana allows filing a diminished value claim against the at-fault party driver’s insurance company as well as under your motorist coverage.
Statute of Limitations: 1 year
Maine doesn’t have a specific law related to these claims. Insurance companies do pay some amount, but just enough to repair the vehicle or buy a replacement. The payment amount never exceeds the actual cash value of the vehicle.
Statute of Limitations: 6 years
In Maryland, these claims are recoverable in third-party cases and through one's insurance coverage.
Statute of Limitations: 3 years
As per the Massachusetts laws, claims are only recoverable in third-party cases. If you are at fault for the accident, you are not eligible to file a diminished value claim.
Statute of Limitations: 3 years
Michigan doesn’t require insurance companies to pay for diminished value claims. You can still recover up to $1,000 from your insurance company using the no-fault mini-tort statute.
Statute of Limitations: 3 years
In Minnesota, diminished value is only recoverable using the third-party claim. If you are at fault for the accident, you can’t file a claim to recover losses.
Statute of Limitations: 6 years
Mississippi lets car owners file claims against the at-fault party’s insurance company. However, if the at-fault driver is uninsured or underinsured, you can also file the claim against your own insurance company.
Statute of Limitations: 3 years
Car owners can only recover the diminished value from the at-fault party’s insurance company. This state doesn’t allow filing a claim against your own company and recovering losses.
Statute of Limitations: 5 years
You are allowed to file a third-party diminished value claim montana and recover losses. However, in case the at-fault driver is uninsured or underinsured, you can not file the claim under your motorist insurance coverage.
Statute of Limitations: 2 years
Car owners in Nebraska are eligible to file a claim against the at-fault driver’s insurance company and recover their losses. They must carry minimum liability insurance, a surety bond, or a property bond.
Statute of Limitations: 4 years
Nevada only allows third-party insurance claims, so you cannot recover the diminished value from your motorist insurance.
Statute of Limitations: 3 years
In New Hampshire, only third-party insurance claims are allowed, so you must not be at fault for the accident, and you can file the claim if the damage exceeds $1500.
Statute of Limitations: 3 years
You can file the claim against the at-fault driver’s insurance company and under your motorist insurance coverage to recoup the diminished value.
Statute of Limitations: 6 years
In New Mexico, diminished value claims are allowed against the third-party insurance company and your own insurance company, with minimum liability coverage being required.
Statute of Limitations: 4 years
You can only file the claim against a third-party insurance company in New York and not your own motorist coverage.
Statute of Limitations: 3 years
Filing claims against the at-fault party’s insurance company and your own insurance company is allowed in North Carolina, and minimum liability coverage is required.
Statute of Limitations: 3 years
North Dakota only allows filing claims against the third-party insurance company, so if you are at fault for the accident, you won’t be able to recover the losses
Statute of Limitations: 6 years
In Ohio, you can recover the diminished value through a third-party claim or under your own motorist coverage.
Statute of Limitations: 2 years
Only third-party claims are allowed in Oklahoma, so if you are at fault for the accident or if the at-fault driver is uninsured or underinsured, you can’t recover the losses.
Statute of Limitations: 2 years
Oregon allows filing diminished value claims against the third-party insurance company as well as under your own coverage. Due to this, if the at-fault driver is uninsured or underinsured, you can still recover the losses.
Statute of Limitations: 6 years
In Pennsylvania, you can only recover the diminished value through third-party claims; you can’t file a claim under your motorist coverage and recover the losses.
Statute of Limitations: 2 years
You can recover the diminished value by filing a claim against the at-fault driver’s insurance company and your insurance company in Rhode Island.
Statute of Limitations: 10 years
Diminished value is recoverable through third-party claims and own motorist coverage in South Carolina
Statute of Limitations: 3 years
In South Dakota, you can only file a diminished value claim and recover losses from the at-fault party’s insurance company, and not under your motorist insurance.
Statute of Limitations: 6 years
You can recover the diminished value under your motorist insurance and from the at-fault party’s company in Tennessee.
Statute of Limitations: 3 years
The diminished value of your car is recoverable from the at-fault driver’s insurance company and through your uninsured motorist coverage.
Statute of Limitations: 2 years
Diminished value is recoverable in third-party cases and via own motorist coverage, and minimum liability coverage is required.
Statute of Limitations: 3 years
You can recover the diminished value of your vehicle through a third-party insurance claim or from your uninsured motorist coverage.
Statute of Limitations: 3 years
The diminished value of vehicles is recoverable through your uninsured motorist coverage and in third-party cases.
Statute of Limitations: 5 years
The diminished value can be recovered in third-party cases and through your motorist insurance. Minimum liability coverage or a liability bond for at least $60,000 is necessary.
Statute of Limitations: 5 years
You can recover the diminished value of your car from the at-fault party’s insurance company and through your motorist insurance.
Statute of Limitations: 2 years
In Wisconsin, you can only file a diminished value claim against the at-fault party’s insurance company and not under your motorist coverage. All drivers must present financials to the insurance company.
Statute of Limitations: 6 years
The diminished value is only recoverable through third-party cases. So, if you are at fault for the accident, you can’t file a claim and recover the losses.
Statute of Limitations: 4 years
We list 4 tips that help you get a fair diminished value settlement from the insurance company.
You can hire an independent car appraiser and get your car valued. They will assess your vehicle and provide you with a detailed appraisal report, including accurate market value for your car.
You need to present all the documents related to the accident and your car, such as damage photographs, police reports, car title, registration certificate, repair estimates, appraisal report, etc.
Generally, the insurance company offers a lower settlement amount. If you believe you deserve a higher payout, negotiate with them and try to get a fairer settlement.
If nothing works out, you can hire an attorney experienced in car cases and file a lawsuit against the insurance company.
Need a diminished value appraisal? We are ADR Claim, a team of professional appraisers, assessing your car layer by layer to provide you with an accurate appraisal report. We have years of experience in this industry, and we ensure 100% customer satisfaction. Contact us for a free quote and to schedule your car’s appraisal.
