What is Diminished Value?
In its most simple definition, Diminished Value is the loss that happens to a vehicles value when it is involved in an accident. Common sense tells us that we would not pay the same amount of money for a vehicle that has been in an accident as we would pay for one that has not.
This loss of value would not occur if the accident had not happened.
If the accident was the fault of another person, the law protects you from having to suffer this loss. The law places the burden of this loss on the individual who caused the accident. If the individual who caused the accident has insurance, the loss must be covered by the insurance policy in most cases.
Also, because the insurance of the individual who caused the accident has the obligation to pay the claim, they factor this into the premiums that they collect from their clients. Yes, if you have insurance, part of the payment you are making is for the insurance company to pay diminished value for anyone you may have an accident with.
We are not lawyers, nor do we offer any legal advice. However, we are happy to provide you with our expertise and knowledge that is based on training both in the field and by the Licensing entities in the States in which we operate.
Diminished Value is a real loss that is covered under the Federal Tort Laws. These laws protect people from suffering a loss because of the actions of another person.
According to the Second Restatement of Torts Section 928: “Compensation for damages to personal property can include the reasonable cost of repairs or restoration with due allowance for any difference between the original value and the value after repairs.”