Know who pays
First-party vs third-party diminished value
A third-party claim is against the at-fault driver’s insurer, and most states allow it if you can prove the loss. A first-party claim is against your own insurer, and there the answer usually turns on your policy’s wording: many standard policies exclude lost market value.
Third party
Against the at-fault driver
Based on the general rule that the person who caused the damage pays for it. You must prove the loss, typically with an independent appraisal. The at-fault driver’s property-damage limit can cap what their insurer pays.
First party
Against your own insurer
Based on your insurance contract. Many collision policies promise only to repair or replace, and courts in many states have read that to exclude lost value after proper repairs. Some policies and states differ.
By state
Where first-party claims stand
First-party claims recognized (1)
Courts in these states have required an insurer to pay diminished value under the policy wording in front of them. Your own policy’s wording still controls.
Depends on your policy wording (14)
Courts have gone both ways depending on the policy language, or a regulator has taken a position. Read your collision and uninsured-motorist sections.
Standard policies usually exclude it (14)
Courts have held that common “repair or replace” wording does not cover lost market value after proper repairs. Uninsured-motorist coverage can differ.
Unsettled (22)
We found no controlling appellate decision on first-party diminished value in these states.
Summaries of our state research. Each state page explains the cases and sources.
Before you file
Read your policy first
Look at the collision section’s “limit of liability” and any exclusions that mention “diminution in value,” “diminished value” or “loss in value.” If your policy excludes it, a third-party claim is usually the route.
Common questions
Can I make both kinds of claim?
You generally pursue the at-fault driver’s insurer for diminished value. Your own insurer usually pays repairs under collision coverage and may then seek repayment from the other driver’s insurer (subrogation); whether your own policy also owes diminished value depends on its wording and your state.
What if the at-fault driver was uninsured?
Uninsured-motorist property-damage coverage, where you have it, sometimes treats diminished value differently from collision coverage. Maryland’s regulator, for example, has said UM property damage must include it. Check your policy and state page.
Does it matter if I was partly at fault?
Yes. Most states reduce what you can recover by your share of fault; a few bar recovery if you were more at fault than the other driver, and a few (such as Maryland) can bar recovery for any fault at all. State law changes and depends on the facts of each claim. For legal advice about your situation, consult a licensed attorney in your state.
Not sure whether an appraisal will help?
The claim review is free: we look at your situation and tell you whether an appraisal is likely to help. The appraisal itself is a paid report. We help from start to finish, including a custom demand letter, and our support staff is a phone call away throughout the process.