How to File a Diminished Value Claim: A Step-by-Step Guide

If you've recently been in an accident that wasn’t your fault and had your vehicle repaired, you may be entitled to compensation for the loss in market value—known as diminished value. A common question we hear is: "How do I file a diminished value claim?" or "What do I need to do to file a diminished value claim?" This blog post will walk you through the process so you can confidently pursue the compensation you deserve.

Step 1: Understand What Diminished Value Means

Diminished value refers to the reduction in your vehicle’s market value after it's been involved in an accident, even after quality repairs have been completed. Even if your vehicle looks and drives like new, a reported accident can impact its resale or trade-in value.

There are three types of diminished value:

• Inherent Diminished Value: The most common type. This occurs simply because the vehicle now has an accident history.

• Repair-Related Diminished Value: Arises from substandard or incomplete repairs.

• Immediate Diminished Value: The loss in value immediately after the accident, before repairs are made.

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Step 2: Determine If You’re Eligible

To successfully file a diminished value claim, the following should generally apply:

• You were not at fault in the accident.

• Your vehicle has been fully repaired and the damage exceeded $1,000.

• Your vehicle is not leased (you must be the registered owner).

• The vehicle is typically less than 5 years old.

• The claim is being made within the statute of limitations. For example in your state (in Arizona, it’s 2 years).

Step 3: Gather Documentation

To build a strong claim, collect the following:

• A certified diminished value appraisal (from a licensed IACP appraiser like us)

• A copy of the repair estimate and final invoice

• Photos of the damage (before and after repairs),

• A CARFAX or vehicle history report showing the accident

• Documentation of recent vehicle maintenance or upgrades

Step 4: Submit Your Claim

Contact the at-fault party’s insurance company (or your own if available under uninsured motorist coverage). Ask how to submit a diminished value claim and provide:

• A written demand including the appraised diminished value amount

• Supporting documents

• Your contact information and claim number

Some insurers have specific forms or departments that handle these claims, so be sure to ask.

Step 5: Be Ready to Negotiate

Most insurance companies will push back or make a lowball offer. This is common. Stick to the facts, use your certified appraisal as leverage, and be persistent. You may need to:

• Request a supervisor review

• Provide additional documentation

• Reiterate your legal right to recover diminished value under tort law

Step 6: Consider Escalation If Necessary

If the insurance company refuses to pay a fair amount:

• Request written explanation of denial

• File a complaint with your state’s Department of Insurance

• Consider invoking your right to appraisal if it’s a first-party claim

• Consult legal counsel if you plan to file in small claims court

Final Thoughts

Filing a diminished value claim doesn’t have to be overwhelming. At Collision Claims Advisors, we specialize in helping consumers like you navigate the process from start to finish—with certified reports, demand letters, and expert guidance that gives you the confidence to push back and claim what you’re owed.

Need help? Request a consultation today or start your certified appraisal online.