When you’re involved in a car accident, you want prompt repairs to your vehicle and other property damage. While your insurance might pay for repairs, there’s another financial loss that many drivers overlook: diminished value.
Even after repairs, your car may be worth less than it was before the crash due to the fact that it was in a collision. In Colorado, you may be entitled to recover this loss through a diminished value claim.
What Property Damage Does Car Insurance Typically Cover After a Car Accident?
Colorado law requires drivers to carry property damage liability insurance that covers another party’s damages in a crash. Many drivers choose to purchase additional coverage (e.g., comprehensive and collision) to cover their own property damage after a collision.
These coverages typically pay for:
- Vehicle repairs, including parts and labor, to restore your car to its pre-accident condition.
- The fair market value of the car before the accident if the vehicle is totaled.
- Rental car costs while your vehicle is being repaired or replaced.
- Damage to the other driver’s vehicle or other damaged property.
However, standard property damage coverage does not automatically pay for the reduction in your car’s resale value after an accident, even if it was fully repaired. That’s the job of diminished value claims.
What is a Diminished Value Claim?
A diminished value claim, also called diminution in value, provides compensation for the loss in market value your vehicle experiences after an accident. Buyers and dealerships generally pay less for a car with an accident history, even if it’s been restored to excellent condition.
There are three main types of diminished value:
- Immediate diminished value, which is the difference in resale value right after an accident (before repairs).
- Repair-related diminished value for the loss of value due to substandard repairs or use of aftermarket parts.
- Inherent diminished value covers the stigma a repaired vehicle carries simply because it has an accident history. (This is the most common.)
In Colorado, if another driver was at fault for your accident, you can typically pursue a diminished value claim against their insurance company. You’ll need evidence of your car’s pre-accident value, the cost and quality of repairs, and an appraisal showing the post-repair market value.
Do Insurance Companies Pay Diminished Value for Older Cars?
Insurance companies often push back on diminished value claims, especially if your car is older or has high mileage. They may argue that the accident didn’t meaningfully reduce the vehicle’s market value.
While newer cars usually have stronger diminished value claims, older vehicles can still qualify if:
- They were in good condition before the accident.
- They had low mileage for their age.
- They were rare, collectible, or in high demand.
- The repairs were substantial and significantly impacted the vehicle’s desirability.
Colorado law does not set a specific age limit for diminished value claims. However, the older the vehicle, the harder it can be to prove a significant loss in value.
Contact an Experienced Car Accident Lawyer for Help Seeking Compensation After a Crash
Diminished value claims can be challenging to prove, and insurance companies often fight them. A skilled Littleton car accident lawyer can help by:
- Gathering evidence of your vehicle’s pre-accident market value.
- Working with appraisers and experts to document your diminished value.
- Negotiating with the insurance company to seek fair compensation.
- Filing a lawsuit if the insurer refuses to pay a reasonable amount.
Contact a Littleton personal injury attorney today to discuss your options for pursuing a diminished value claim. Legal Help in Colorado offers free consultations.