Under law, everyone should disclose accident history on a vehicle when selling. After disclosure, most buyers are not willing to pay the same amount for a vehicle with accident history as the same vehicle that has not been in an accident, especially a serious one. Loss of Value or Diminished Value is the difference in the market value of a vehicle without accident history and the market value of the same vehicle with accident history. This difference is part of the total Property damage claim.
After a covered loss, the insurance company is obligated to the policyholder to have the damaged property completely restored to pre-loss condition. If the accident was your fault, it is a first party claim, and you will be dealing with your insurance company based on the terms and conditions of your policy. If the accident was someone else's fault, it is a third party claim, and you will be dealing with the insurance company of the person that hit you.
The key to recovering all losses owed is having an accurate assessment of your damages, knowing who is responsible to pay for damages and understanding the necessary steps of the recovery process. Vehicle owners have the right to disagree with any assessed amount of loss. Depending on the policy and state law, provisions are provided for dispute resolution. It is important to completely visually inspect the vehicle when it is delivered, but often the average consumer cannot see all possible defects. If you are unsure we strongly suggest you hire an independent appraiser for a post repair inspection - any flaws or defects in repairs after an accident or "evidence of repairs" can affect your trade-in or resale value negatively.
It is up to state laws and insurance policy terms to determine if diminished value will be paid out or not. Most states do not require it to be paid out. States may have laws that allows DV, does not allow it or no real law so court cases decide about the requirement for diminished value claims if an insurance company and a car owner cannot come to an agreement on their own.
As for how DV is calculated, it too varies depending upon state laws and insurance company's guidelines. In general you can try to determine diminished value on your own by seeking information from a dealership on what the value of your vehicle would have been before the accident that damaged it and then what the value would now be with the damages it suffered, even if repaired properly.
Some things taken into account when trying to calculate diminished value are: the overall condition of the vehicle prior to the loss, the amount of damage, the type of damage, the extent of the damage, and the damage area. Accident or repair related loss of value can be assessed through an inspection of the vehicle by a qualified mechanic or post-repair inspector.
If you are trying to make a diminished value claim you can contact your state's insurance regulator to see if there are state laws pertaining to DV and any consumer advice on how the calculation for it should be made. You can also contact an auto dealership to get an idea of what you will expect the loss of value to be for your vehicle.
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