Why file against their insurer and not your own?
Diminished value is the drop in what your car is worth because it now has an accident on its history, even after a good repair. When another driver caused that accident, their liability coverage is generally what pays for the harm they caused, and in many states that harm includes lost value.
Claiming diminished value from your own insurer is a different story. Many policies exclude it, and first-party diminished value claims are limited or not recognized in many states, though a few treat it differently. If you are not at fault, the at-fault driver's insurer is usually the right place to start.
When should I file the diminished value claim?
There are two moments that matter.
Tell them early. As soon as you open the property damage claim, put the at-fault insurer on notice in writing that you intend to claim diminished value. One sentence is enough. It makes clear the claim is not finished when the repair is.
Send the demand after the repair. The best evidence of diminished value exists only after the car is fixed: the final repair invoice, the full list of parts replaced, and the vehicle history report once the accident appears. Sending a number before then means guessing.
And above all, do not sign a release on the property damage claim until diminished value is either paid or expressly carved out in writing. Read every check and form for release language before you sign or deposit.
What evidence do I need?
Adjusters respond to documents, not adjectives. Gather:
- The final repair invoice and estimate, including every supplement. Structural, frame or airbag work matters most.
- Photos of the damage before the repair.
- The police report or anything else showing the other driver was at fault.
- Your car's pre-accident details: mileage, trim, options, maintenance records and recent photos.
- A vehicle history report showing the accident once it posts.
- A market-based valuation comparing what your car was worth before the crash with what it is worth now, repaired, with the accident on record. This can be an independent appraisal or written trade-in quotes from dealers, ideally both.
The valuation is the piece most people skip, and it is the one the adjuster will argue with. A number tied to your specific car and your local market is much harder to wave away than a round figure.
How to file, step by step
- Confirm the at-fault insurer and claim number. Get the adjuster's name and email.
- Send a one-line notice that you will be claiming diminished value. Keep a copy.
- Let the repair finish. Ask the shop for the final invoice with all supplements.
- Pull the vehicle history report once the accident appears on it.
- Get your valuation. Pre-accident value versus post-repair value, with the reasoning shown.
- Send a written demand with the valuation and documents attached (template below).
- Answer objections in writing, one by one, with evidence.
- Keep a log of every call, with the date and what was said, and follow calls with an email summary.
A demand email you can adapt
Subject: Claim [number], diminished value demand Hello [Adjuster name], Your insured caused the collision on [date] that damaged my [year make model], VIN [number]. Repairs were completed on [date]. Because the vehicle now carries a reported accident history, its market value is lower than before the collision. Based on the attached valuation, I am claiming diminished value of [amount]. Attached: - Independent valuation / dealer quotes - Final repair invoice and supplements - Pre-accident photos and records - Vehicle history report Please respond in writing within [number] days with your position and the basis for it. I have not signed a release of my property damage claim. [Your name] / [Phone]
What should the claim include, and what should it leave out?
Keep the diminished value demand about one thing: the drop in market value. Other losses from the same crash, such as a rental, towing or your deductible, are real, but they are separate items with their own receipts. Mixing them into one number makes it harder for the adjuster to see what you are asking for and easier for them to dispute the whole thing.
Leave out anything you cannot support. A demand that claims more than your valuation shows invites the adjuster to discount everything else in it. A clear figure with the reasoning attached is easier to accept.
What will the adjuster usually say?
Expect pushback, and expect it to sound final. Common replies include:
- "We use a formula." Some insurers start from formulas that apply a fixed cap and then reduce it for damage and mileage. Critics argue these undercount, because the cap and the reductions are assumptions rather than market evidence. Ask the adjuster to show you what market data supports their figure for your specific car.
- "Your car was fixed properly, so there is no loss." Diminished value is about how buyers price an accident history, not about repair quality. See does a Carfax accident report lower my car's value.
- "You haven't sold the car." Rules on this vary. The usual argument is that the loss happened when the accident went on record, whether or not you sell. Ask them to cite the policy language or rule they are relying on.
- "Your car is too old or has too many miles." That can be a fair point for some cars. It is not automatic for all of them. Your valuation should address it directly.
What if they deny the claim or offer too little?
Ask for the denial or the reasoning in writing. Then:
- Send a short rebuttal that answers each reason with your evidence.
- Ask for a supervisor review.
- Consider a complaint with your state's Department of Insurance if the insurer stops responding or will not explain its position.
- For amounts that fit, many owners use small claims court against the at-fault driver. Time limits for property damage claims vary by state, so check yours early.
If your car was new or nearly new, there is more to say about that specific case in diminished value on a new car with low miles.