Diminished Value Claims

Diminished value is the difference between what a car that has been wrecked is worth and what it would have been worth had it never been wrecked, according to Bankrate. This decrease occurs even if the auto is repaired to a good as new condition.

Reason

The reason this decrease in value occurs is that any potential buyer can check a car history service and will not be willing to pay as much for a car that has been in an accident as one that has not. This is because of concern that some problems may have gone undetected.

Amount

The fact that a car has been wrecked can diminish its value by as much as 18 percent.

Insurance

Most auto insurance companies will not compensate the owner of the wrecked car for diminished value unless state law requires them to do so. Some states, such as Texas, Maine, South Carolina and Delaware do not require insurance companies to compensate for diminished value. Others, such as Georgia and Kansas do require payment for diminished value. A third group of states, such as Louisiana, may allow recovery if the owner is not at fault and the other driver's insurance pays the claim.

References

• Bankrate: Car Wrecked? "Diminished Value" May Be Your Loss.

Resources

• Insure: "Diminished Value" Car Insurance Claims Get the Wrecking Ball.