Which of those you are in decides everything else. Here is how to tell.
Third-party: the other driver was at fault
This is the ordinary case, and the one the claim was built for. You are not claiming under your own contract. You are claiming that another driver damaged your property, and the repair did not make you whole because the car is now worth less than it was.
Our state data records this as recognised in 26 states outright, and in seven more with a qualification — a statute rather than case law, a narrow reading, or a single recent decision carrying the weight. In six states it is recorded as not recognised, and in the rest the record is thin: no reported cases, or an open question.
Your state page says which one you are in, in plain language, with the filing deadline and the rule it comes from: find your state.
We do not make up what a state's rule is. If our data does not have a quotable authority for your state, the page says so instead of inventing one.
First-party: your own policy
This is where most people are surprised.
"First-party" means a claim under your own insurance contract, against your own insurer. In most of the country, your collision coverage promises to repair or replace the car. It does not promise to make up the difference in market value afterwards. So when you are at fault, the repair gets paid and the value loss does not.
Our state data records first-party recovery as yes in six states: Colorado, Georgia, Minnesota, Mississippi, Oregon and Washington. Three more are recorded as qualified — Missouri as limited, New Jersey as policy-dependent, Vermont as regulatory. In 26 states it is recorded as no, and in the remaining sixteen the record is unclear, ambiguous or has no reported cases.
Two things follow.
- Even in the "yes" states, your policy wording controls. Read the collision and property damage sections of your own policy before you write anything.
- A "yes" on first-party does not mean you should use it. A claim on your own policy runs through your own insurer, your own deductible and your own claims history. Where the other driver is at fault, the third-party route is normally the one to take.
There is a third situation worth knowing about: if the at-fault driver has no insurance, some states allow the claim under your uninsured motorist coverage. Whether yours is one of them depends on your state and your policy. Your state page and your declarations page are the two things to check.
What "the insurer pays" actually looks like
Nobody sends a cheque because you asked. Insurance regulators say this out loud: the insurer does not pay diminished value automatically, and the burden of showing the loss sits with the owner.
In practice an offer, when it comes, is usually built from a short formula — often called 17c — that caps the payout at 10 percent of the car's value and then multiplies it down for damage and mileage. On one of our sample cases, a 2022 RAV4 with a $7,200 repair and a $29,582 pre-accident value, that formula produced $887 where the evidence-based estimate was $2,750. Example from a sample report, not a promise.
The gap between those two numbers is the whole argument, and you cannot make it without documentation. See how diminished value is determined and how to send the claim.
When insurance does not pay
Be honest with yourself about these before you spend time on it.
- You were at fault, and you are not in one of the first-party states.
- Your state does not recognise the claim. A handful do not.
- The car was declared a total loss. That is a different argument about the value of the car, not about the value it lost after a repair.
- The deadline passed. The filing period comes from your state's property damage limitation rule and runs from the date of the crash. It ranges from two years to ten across the states. Your state page has yours.
- The loss is genuinely small. An older, high-mileage car with cosmetic damage may not be worth the effort. The free calculator will tell you that before you pay anything.
A note on where we can help
We do not sell in every state. Where our data says a state's rules make a self-help report a bad idea, we say so and do not take your money. You can still use the calculator and read your state page.
Questions
Does insurance pay for diminished value if I was at fault?
Usually not. The standard policy covers repairing the car, not the value it lost. Six states are recorded in our data as allowing a first-party claim; in most, your own insurer will not pay it. Your policy wording still controls.
Can insurance deny a diminished value claim?
Yes, and a first denial is common. A written denial is useful, because it names what they dispute — the number, the fault, or the state rule — and that is what your follow-up answers. If it goes nowhere, you can file a complaint with your state insurance regulator, or file in small claims court if your number is under your state's limit. Your state page has both.
What is the average payout for a diminished value claim?
There is no honest average across the country, and any site that publishes one cannot show you its data. What is checkable is the gap on a single set of facts: $887 from the formula against a $2,750 estimate in the example above. Example from a sample report, not a promise.
How long can a diminished value claim last?
The outside limit is your state's property damage filing period, from two to ten years depending on the state, running from the accident date. It is not a deadline the insurer sets, and a regulator complaint does not pause it.
Do I claim against my insurer or theirs?
Theirs, if they were at fault. Your own policy only comes into it if you were at fault and happen to be in a first-party state, or if the other driver was uninsured and your state allows it under uninsured motorist coverage.