Diminished Value Law

Cars that have been in a crash are said to have a diminished value.

When a car accident occurs, usually insurance companies will pay to repair any damages. However, diminished value comes into play when trying to resell a car that has been in a crash.

What is Diminished Value?

Diminished value refers to the difference between what a car is worth before a crash and after the crash. Diminished value can be as high as 18 percent, according to Bankrate.com.

Insurer Liability

According to most state insurance departments and insurance companies, insurers are not liable to pay for diminished value. However, some states require insurers to pay for diminished value claims, according to Bankrate.com.

Fault of Accident

Some states, such as Louisiana, say liability for diminished value claims depends upon who is at fault. The person at fault cannot usually recover for diminished value claims in states, according to Bankrate.com.

References

• Bankrate: Car Wrecked? 'Diminished Value' may be your loss