What a diminished value claim is
Diminished value is the drop in market value a car suffers because it has been in an accident, even after a complete repair. A diminished value claim asks for that drop on top of the repair cost. It is normally a third-party claim against the insurer of the driver who caused the accident; most policies do not pay it for your own car, and among the states we checked only Georgia requires that.[2]
Diminished value claim by state
The table lists every state where we found the rule in an official source (insurance department, statute, regulation or appellate opinion), checked November 14, 2026. For the other states we found no official statement either way; that does not mean the claim is barred, only that you should check with your state insurance department.
| State | Third-party claim | What the source says |
|---|---|---|
| Florida | Allowed | Florida DFS consumer guide; Florida law silent on valuation method.[1] |
| Georgia | Allowed | Georgia's Insurance Commissioner directed insurers in 2001 to assess and pay diminution of value on physical damage claims; a 2008 directive says total reliance on one formula may not be appropriate (Amica v. Sanders, Ga. Ct. App. 2015).[2] |
| Maryland | Allowed | MIA consumer guide: DV is part of liability claim against at-fault party, not covered under own policy; claimant must prove (dealer written estimate or independent appraiser).[3] |
| Massachusetts | Limited | Depends on policy form: SJC McGilloway v. Safety Ins. Co., 488 Mass. 610 (Oct 2021): IDV recoverable under Part 4 of 2008 standard policy if proved; Jan 2025 SJC (Cubberley v. Commerce) per Mass. DOI: 2016 standard policy does not require insurer to cover IDV (at-fault party may still be liable). Own policy: no coverage.[4] |
| Michigan | Limited | Mini-tort: owner can recover up to $3,000 (accidents after July 1, 2020; $1,000 before) for vehicle damage not covered by insurance; small claims; comparative fault, none if >50% at fault. Statute does not use the term 'diminished value'.[5] |
| North Carolina | Allowed | 11 NCAC 04 .0418(b): third-party release does not bar promptly asserted DV claim; DV defined as diminution in fair market value under G.S. 20-279.21(d1) (statute text itself not retrieved).[6] |
| Texas | Allowed | TDI Bulletin B-0027-00 (Apr 6 2000): no first-party DV duty after complete repair; third-party and UM/UIM may owe loss of market value.[7] |
| Virginia | Allowed | Virginia SCC: liability coverage pays all damages insured is legally obligated to pay; insurers typically pay DV when warranted, but Virginia law is silent and prescribes no method.[8] |
| Washington | Allowed | WA OIC: DV claim typically filed against at-fault party's insurer; some policies don't cover DV; claimant must prove.[9] |
How to file a diminished value claim
- Confirm the other driver was at fault and get the claim number from their insurer.
- Finish the repair and keep the final invoice; the claim is about the repaired car.
- Document the value before and after: written dealer offers, an independent appraisal, or comparable listings with and without an accident history. The diminished value calculator turns these into a figure.
- Send a written demand to the at-fault insurer with your figure, the method and copies of the evidence, and ask for a written answer with the method they used.
- Keep a log of every call and letter, with dates.
The self-help kit prepares the demand letter, a total loss dispute letter and a checklist from your numbers:
Evidence to collect
State insurance departments advise keeping a full paper trail of the accident and the claim.[23] For a value claim, collect:
- Police report (get a copy for the insurer)
- Photos of all vehicles, license plates, damage, street signs and road angles
- Other driver's insurance card and license photo; witness names/phones
- Written notes: location, time, weather, what happened
- Adjuster name/phone; log of dates of conversations with agent/adjuster
- Repair estimate(s) and written explanation of insurer decisions
- Receipts for expenses (towing, roadside, rental)
- Medical records and bills if any
- For value disputes: comparable-vehicle listings/dealer quotes (TDI), dealer written estimate or independent appraisal for DV (Maryland)
Total loss settlement: when the car is totaled
A total loss settlement replaces the claim for repairs and diminished value: the insurer pays the car's actual cash value instead. Several states set rules for how that value is figured:
| State | Rule |
|---|---|
| California | Cash settlement must be based on cost of a comparable automobile and include all applicable taxes and one-time transfer fees plus license/annual fees for remaining registration term.[10] |
| New York | Minimum cash offer is average of retail values in two approved manuals or a dealer quotation; insurer must give insured a detailed copy of its total-loss calculation no later than payment; sales taxes included in replacement amount.[11] |
| Washington | Cash settlement on comparable vehicle; offers itemized/verifiable; insurer must provide copy of valuation report on request; must include all government taxes and fees whether or not claimant keeps the vehicle.[12] |
| Florida | First-party total loss cash settlement based on cost of comparable vehicle, including sales tax if applicable; valuation documents must be provided on request.[13] |
| Pennsylvania | Total loss appraised value is replacement value by guide-source method (average of two retail book values) or other listed methods; appraisal lists applicable sales tax.[14] |
| State | Acknowledge | Accept or deny | Notes |
|---|---|---|---|
| California | 15 | 40 | calendar days[15] |
| New York | 15 | 15 | business days (decide: after proof of loss)[16] |
| Ohio | 15 | 21 | days (decide: after proof of loss)[17] |
| Texas | 15 | 15 | acknowledge: days; decide: business days after receiving all items (first-party claims only)[18] |
| Washington | 10 | 30 | acknowledge: business days; decide: calendar days after notification (first-party claimant)[19] |
| Pennsylvania | 10 | 15 | working days (decide: after proofs of loss, first-party)[20] |
Appraisal clause in auto insurance
The appraisal clause in an auto insurance policy settles a dispute about the amount of a loss without going to court. The Texas Department of Insurance describes it this way: you and the insurer each hire an appraiser, the two appraisers choose a third as umpire, and the umpire rules on any disagreements.[21] Maryland's guide notes you pay your own appraiser's fee.[22] Appraisal decides the amount only, not whether the loss is covered, and your policy's wording controls the details.
DeadlinesStatutes of limitations for property damage and your policy's own time limits apply. Send your claim in writing as soon as the repair is done.
For the numbers behind a claim, see the diminished value calculator; for ordinary depreciation, the car depreciation calculator; and for what coverage costs in your state, average cost of auto insurance.
Frequently asked questions
Can I file a diminished value claim with my own insurance?
Usually not. Among the states checked, only Georgia requires your own insurer to pay it; Texas, Florida, Maryland and Massachusetts sources say it is not covered under your own policy.
How long do I have to file a diminished value claim?
It depends on your state's statute of limitations for property damage and the insurer's claim rules. File in writing soon after the repair is finished.
What is a total loss settlement based on?
The car's actual cash value just before the accident. In states such as California, New York, Washington and Florida, the rules require it to reflect a comparable vehicle and, in several of them, sales tax and fees.
What does the appraisal clause in auto insurance do?
It lets you and the insurer each hire an appraiser, who pick an umpire to settle disagreements about the amount of the loss.
Sources
- Diminished value: FL official source
- Diminished value: GA official source
- Diminished value: MD official source
- Diminished value: MA official source
- Diminished value: MI official source
- Diminished value: NC official source
- Diminished value: TX official source
- Diminished value: VA official source
- Diminished value: WA official source
- 10 CCR 2695.8(b)(1)
- 11 NYCRR 216.7(c)(1); sales tax language in 216.6
- WAC 284-30-391(2),(4)
- Fla. Stat. 626.9743(5)(a)
- 31 Pa. Code 62.3
- 10 CCR 2695.5(e); 2695.7(b)
- 11 NYCRR 216.4(a); 216.6(c)
- Ohio Adm. Code 3901-1-54(F)(2),(G)(1)
- Tex. Ins. Code 542.055(a), 542.056(a)
- WAC 284-30-360(1); 284-30-380(1)
- 31 Pa. Code 146.5(a); 146.7(a)(1)
- What if my insurance isn't paying enough?
- A Consumer Guide to Auto Insurance
- Were you in a wreck? Tips for auto insurance claims