Insurer guide · Rulings in one to three states
Diminished value claims with American Family Insurance
Two appellate decisions in our research involve American Family and diminished value. In 2001 the Wisconsin Court of Appeals held that the collision policy before it did not require payment for diminished value on top of repairs. In 2003 the Minnesota Court of Appeals, in an unpublished decision, ruled on procedure and did not decide whether the policy covered it.
By the Autoloss team · Reviewed by Monica Fisher · Published
What the two decisions cover
Both cases were brought by American Family policyholders under their own collision coverage, so both are about what a policy promises. Neither is about a claim against an at-fault driver. Autoloss is an independent appraisal company that is not affiliated with or endorsed by American Family. The name is used only to identify the insurer.
Wisconsin: Wildin v. American Family (2001)
The policyholder’s 1999 Kia Sportage had unibody or frame damage, and she said that repair could not return it to its pre-collision market value. The policy stated that the limit of liability “shall not exceed the least of” the actual cash value, the amount necessary to repair or replace the property, or the decrease in value caused by the loss. The Wisconsin Court of Appeals held that this wording let the insurer choose repair and did not require it to compensate her for diminished value as well.
The court also said that earlier Wisconsin cases about what a negligent driver owes were about tort damages, not about reading policy language, so they did not decide her case. That distinction matters if you are on the other side of it. See the Wisconsin page.
Minnesota: Carolla v. American Family (2003)
This Minnesota Court of Appeals decision is unpublished, which limits how it can be cited in Minnesota courts. A trial court had found coverage for diminished value and issued an injunction. On appeal, the court affirmed that the trial court, and not no-fault arbitration, could decide the legal question of coverage, while individual claims stayed subject to arbitration on the amount of any loss. It reversed the injunction and the bond requirement and sent the case back. It expressly listed whether the policy covers diminished value as an issue that was not before it. The Minnesota page covers the state’s rules.
Taken together, the two cases say something about two policy forms in two states at that time. They are not a description of how American Family handles claims now.
If an American Family policyholder hit you
Then neither decision above is about your situation. You are a third-party claimant, and the question is what your state’s law lets you recover from the driver who caused the damage. First-party vs third-party diminished value explains the difference, and diminished value laws by state shows where each state stands.
Submitting the claim
When we checked in October 2026, American Family’s claims page described filing through an online account, its mobile app or the policyholder’s agent, and linked to an option to file as a guest. For a diminished value demand on an open claim, write to the adjuster handling it. Our insurer contact page explains how to find the current contact from your claim paperwork. Put the claim number, the amount and the supporting documents in one package, as set out in the demand letter guide.
Proving the loss in value
Wildin involved structural damage. Whether damage of that kind produces a recoverable claim is a legal question for your state and policy. How much value was lost is a separate, factual question, and that is what a diminished value appraisal answers. Autoloss reports are typically 24–48 hours after all required information is received.
If you cannot agree
See after your appraisal for the options, and how to file an auto insurance complaint for the regulator route. The shared steps are in filing a diminished value claim with any insurer. The Allstate guide covers a Wisconsin third-party case.
Common questions
Does American Family pay diminished value in Wisconsin?
In Wildin (Wis. Ct. App. 2001), the court held that the collision policy before it did not require diminished value in addition to repairs. That was a claim on the policyholder’s own coverage. A claim against an at-fault driver is governed by Wisconsin tort law; see the Wisconsin page.
What did the Minnesota Carolla decision decide?
It was an unpublished 2003 decision about procedure. The court said the trial court could decide the coverage question, reversed an injunction and bond, and did not decide whether the policy covers diminished value.
Is Autoloss affiliated with American Family?
No. Autoloss is independent and is not affiliated with or endorsed by American Family. The name is used only to identify the insurer.
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Start here
Filing a diminished value claim with any insurer
The six steps that do not change from one insurer to the next.
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.