What is diminished value?
Diminished value is the drop in what your car is worth on the market because it now has an accident history, even after a full and proper repair. Washington's insurance regulator defines it as the difference between the car's market value before the accident and its value after repair. It is usually claimed from the at-fault driver's insurer.
Last checked November 9, 2026 · Official sources (4)
How does a diminished value claim work? An example
Example: your two-year-old SUV is worth about $30,000 when another driver runs a light and hits it. The body shop does $8,000 of good work. But a buyer who sees the accident on a vehicle history report might now pay only $26,000. The $8,000 repair is one claim. The $4,000 gap is the diminished value. These numbers are illustrations, not a valuation.
Proof usually means a written appraisal from a dealer or independent appraiser comparing the car before and after, plus the repair invoice.
Why does diminished value matter after a crash?
Insurers rarely bring it up. If you do not ask for it before you sign a property damage release, you may give it up. It matters most for newer, low-mileage or high-value vehicles, and for leased cars that will be inspected at turn-in.
It is separate from your injury claim. Settling the car first does not settle your injuries, but read the release to be sure it covers only property damage.
How does Texas treat diminished value?
| Type of claim | What the Texas Department of Insurance says |
|---|---|
| Against your own policy (first party) | An insurer is not obligated to pay diminished value when the car is completely repaired to its pre-damage condition. |
| Against the at-fault driver's insurer (third party) | An insurer may be obligated to pay a third-party claimant for loss of market value, regardless of how complete the repair is. |
We did not find an Arizona regulator page on diminished value when we checked. Rules and policy wording vary, so ask the insurer in writing which basis it uses.
Diminished value vs. total loss
Diminished value applies when the car is repaired but worth less. A total loss is when the insurer decides repairs would cost about as much as or more than the car is worth, so it pays the car's value instead of fixing it.
Questions
Can I claim diminished value from my own insurance?
Usually not. Texas regulators say your own insurer is generally not obligated to pay it after a complete repair.
How do I prove diminished value?
Most people use a written appraisal comparing the car's value before and after the crash, along with the repair invoice and photos.
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See if I’m owed moneySources (4)
- Washington Office of the Insurance Commissioner, checked 2026-11-09. “Diminished value is the difference between the market value of your undamaged car before an accident and its market value after you have it repaired.”
- Washington Office of the Insurance Commissioner, checked 2026-11-09. “Typically, you'll file a diminished value claim against the insurer of the at-fault party and not your own insurance.”
- Texas Department of Insurance, Bulletin B-0027-00, checked 2026-11-09. “The position of the Department is that an insurer is not obligated to pay a first party claimant for diminished value when an automobile is completely repaired to its pre-damage condition.”
- Texas Department of Insurance, Bulletin B-0027-00, checked 2026-11-09. “An insurer also may be obligated to pay a third party claimant for any loss of market value of the claimant's automobile, regardless of the completeness of the repair, in a liability claim”