Inherent Diminished Value: Car Insurance Company Screwing You

What is Diminished Value?

Picture this… some idiot hit your car and luckily, he has car insurance and didn’t flee the scene of the accident. However, here’s where inherent diminished value kicks in!

Here’s what happened next…. their insurance company was surprisingly pleasant, and quickly paid for the repairs and provides you with a nice brand new rental car. For repairs, they recommended the “Direct Repair Program” shop did a surprisingly good job, and you liked the rental experience. You are impressed with ABC Insurance, and just developed a new faith in corporate America. You move on with your life.

Congratulations, you got screwed!

The accident went on Carfax. Now buyers will pay much less for your car even if it’s been repaired perfectly. You have suffered a loss in the market value of your vehicle called Inherent Diminished Value. The insurance company is liable to make you whole for it in all 50 states — but they won’t unless you demand it. And they hope you won’t.

Chances are you’ve never heard of diminished value. Don’t worry, neither have 95% of American drivers. The average diminished value settlement check is $3,500. And that’s just for an average car. For a more expensive newer car with low mileage, it can easily be $15,000 or more. Yes, this means billions of dollars in rightful diminished value compensation go unclaimed every single year.

Inherent Diminished Value: Car insurance Company



Can I Claim Inherent Diminished Value?

Of course, you can claim inherent diminished value, but there are a few caveats you should know about.

  • The accident cannot be your fault.
  • You must own or finance the vehicle. You cannot claim DV on a leased vehicle because legally you are not the owner.
  • The vehicle cannot be totaled… Duh!


How Do I Claim Inherent Diminished Value?

  • Wait until your car is fully repaired.
  • Obtain a diminished value appraisal. I highly recommend hiring a professional auto appraiser.
  • Make a claim with the idiot’s insurance (not your own, unless you are in Georgia) by sending them a Demand Letter. That’s how lawyers do it and you should too. Never waste your precious time on the phone with an adjuster… attach the diminished value appraisal to your Demand Letter.
  • Negotiate everything in writing.
  • Celebrate the check!


Let’s just say some adjusters are less ethical than others. Here are Five common BS objections by unethical adjusters designed to avoid payment on a DV claim.

  1. “We don’t pay diminished value.” (they do)
  2. “You must sell your car to prove diminished value.” (you don’t)
  3. “There is no such a thing as diminished value.” (oh, there is)
  4. “Your car has been repaired to as-new condition. There is nothing else we can do for you.” (after an accident a car is never the same and that’s why buyers pay less for it)
  5. “If there is something wrong with the repairs, your problem is with the repair shop, not us.” (lame misdirection attempt. nothing’s wrong with the repairs. that’s not what you’re claiming)


All infuriating lies. If you were a character in Pulp Fiction, you would probably print these out, frame them, hunt down the adjuster and stick the frame where the sun doesn’t shine. Literally. But since you are a law-abiding, wholesome member of society, I recommend you calmly dismiss this nonsense and proceed with your claim.


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What should I do?

If they are not offering you a fair amount, don’t give up. There are still some very effective things you can do to get paid. You can threaten to make a complaint with your state’s Insurance Commission. Insurance companies are terrified of the commissions and that’s because they do many things they wouldn’t tell their grandma about. For that reason, the threat alone often gets you paid. But If it doesn’t then go ahead and file the complaint — the commission will help you settle your claim.

If they are still not offering you what you deserve sue their insured driver (the idiot) in Small Claims. If you can follow the plot on “Judge Judy” you can crush Small Claims. Small Claims courts are designed for everyday people and you don’t need a lawyer there.

If you are already working with an accident attorney on something like a personal injury claim then you can also ask them to handle your diminished value if you don’t feel like it. Many good lawyers will agree because they see it as part of getting their clients everything they deserve.

Finally, educate your friends and family about diminished value so they also stop getting screwed!

Simon Galperin is an independent auto appraiser and an expert on diminished value consulting attorneys, body shops, insurance companies, and individual car owners. If you’d like to get a free diminished value estimate for your vehicle, you can reach him via

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