What Is Diminished Value After a Car Accident?

Published on Jun 25, 2024 at 7:24 pm in Car Accidents.

What is diminished value after a car accident?

If you truly want to maintain the value of your car, you should never drive it off the dealer’s lot. The moment you drive away, your car’s value depreciates as much as 10%, and within a year, that depreciation goes up by as much as 20%.

After a crash, one question you may want to find yourself needing to answer is, “What is diminished value after a car accident?” Why does this amount matter? It could affect the amount of compensation you receive, although that depends on many factors, starting with who was at fault for the Baltimore wreck that seriously injured you and damaged your vehicle.

Understanding Diminished Value

After an accident, you’ll want to start the claims process with your insurance company to get reimbursed for all your out-of-pocket medical expenses if you have med pay benefits. You also need to be covered for car repairs if you have collision coverage. Otherwise, you’ll need to pursue a claim with the other motorist’s insurer, given how Maryland is an at-fault insurance state.

Another loss you may be able to seek compensation for is the diminished value (DV) of your car. An accident will become a permanent part of your car’s history. Even if the vehicle is fully repaired, it will still be branded as “diminished in value.”

The Maryland Insurance Commission describes how the diminished value claim process is supposed to work. The first important thing to remember is that a diminished value claim is not automatic. You need to file a separate claim from any others to tap into it.

In some cases, that DV might not be worth the effort. However, the diminished value could be several thousand dollars if you have a late-model vehicle. You don’t want to leave those funds on the table.

The only way to file a diminished value claim is if you are the car’s owner and the other driver is found to be entirely at fault for the collision that damaged it. That would have you making a claim against that at-fault driver’s insurance company. This is referred to as a third-party claim. The Maryland law does not allow you to file a DV claim against your insurance carrier. That would be a first-party claim.

Total Loss

Data from Maryland’s Department of Transportation finds that the five-year average number of accidents that caused some property damage is 79,215. Many of those accidents can lead to a car being declared a total loss. A total loss refers to a situation where the cost of repairs exceeds the car’s value. For instance, if your car is worth $5,000 at the time of the crash but the repairs would be $7,000, your vehicle would be deemed a total loss.

You can’t make a diminished value claim on a total loss. That only applies to the loss you would incur if you tried to resell the car after the accident.

Calculating the Diminished Value

Every insurance carrier has its own approach for how they calculate a car’s diminished value. Most rely on the Kelley Blue Book for a baseline appraisal. Here are the factors that the insurance adjuster will consider:

  • Make, model, and year of the car
  • Value before the accident
  • Mileage
  • Any previous accident reports
  • Itemized repair costs
  • Title clear from liens

Pursuing the Claim

After paying your medical bills and repairs, an insurance company will be less inclined to pay for diminished value. The best approach to pursuing your claim is to have evidence on your side.

In addition to all the documentation about your accident and repair costs, it will also help to provide any information you have about the upkeep of your car. That can include receipts from your regular oil changes or recent improvements such as new tires or brakes. It might also help to get an independent appraisal of your car’s diminished value after the accident.

If the insurance company continues to resist paying the claim, it will be time to get the team from Belsky & Horowitz, LLC involved. We have combined decades of experience helping clients fight insurance companies to get a fair remedy for an accident.

The day the accident occurs is when the clock starts ticking. You don’t want to wait too long to get the claim process started. Call to discuss your Baltimore car crash today today.



Fill out the form below about your potential case and a personal injury lawyer will get back to you as quickly as possible.