Diminished value (DV) refers to the difference between what the car was worth pre-accident and the fair market value (FMV) of the car post-repair.
Since most car shoppers would be hesitant to buy a car that’s been in a wreck, the DV can be significant. After an accident many owners are not even aware that they can claim DV, and the property damage adjuster handling the claim never bothered to tell them. As a result, when the car owner later attempts to sell or trade-in their vehicle for a new car, they are shocked to discover their car’s loss in FMV.
Pro tip: Even if the insurer pays to properly repair your vehicle and provides you with a rental car, if the insurer doesn’t pay you for the diminished value of your vehicle, the insurer is undervaluing your claim.
Proving diminution in value
Under the property owner rule from the common law in Texas, you can prove the DV of your vehicle before and after repairs by comparing the book value or online sources and a quote from a local dealer after the disclosure of the repairs.
Alternatively, you can hire an appraiser who can offer expert testimony at a deposition or trial regarding the vehicle’s DV.