How to file a diminished value claim, step by step

Before you start: the three things that decide whether it is worth doing

1. Fault. Diminished value is normally a claim against the at-fault driver's insurer. If you were at fault, the standard policy pays to repair your car but not for the value it lost. See Does insurance pay for diminished value? for the first-party side.
2. Your state. States are not the same on this. A few do not recognise the claim at all, and the filing deadline ranges from two years to ten depending on where you are. Your state page has your own rule and your own deadline: find your state.
3. Repaired, not totalled. This is a claim about a car that was fixed and handed back to you. If the insurer declared your car a total loss, this is a different argument.

Step 1: Gather the paperwork

Collect these before you write anything. A claim with documents attached is a different conversation from a claim without them.

• The final repair invoice, including every supplement. Not the first estimate — the final bill, showing what was replaced and what was repaired.
• The claim number and the date of loss.
• The police report, if there is one.
• Photos: the damage, the repair in progress if you have it, and the finished car.
• A vehicle history report, showing how the accident is recorded.
• Any written dealer offer you have, before or after the repair.
• Your odometer reading on the date of the crash.

If you are missing the repair invoice, ask the body shop. They will have it.

Step 2: Put a number on the loss

This is where most claims fall over. "My car is worth less now" is not a claim. A number with a method behind it is.

You have three options.

• Do the arithmetic yourself from your repair total, your car's pre-accident value and local listings. How to determine diminished value shows the working.
• Use our free calculator to get a range in about two minutes, then decide whether you want the full report.
• Pay someone to inspect the car. That usually costs more than a self-help report and is worth it in a narrow set of cases, mainly when you expect to end up in front of a judge.

Whatever you choose, write the number down with the reasoning attached. The insurer will ask where it came from.

Step 3: Write the demand letter

One page, plain, unemotional. It should contain:

• Your name, the claim number, the date of loss, the vehicle and the VIN.
• One line saying the other driver was at fault.
• What the repairs were, in two or three sentences.
• The amount you are asking for, and the number behind it.
• A response date. Three weeks from the postmark is a normal window.
• One sentence saying the letter concerns diminished value only and is not a release of any other claim.
• A list of the enclosures.

Do not threaten. Do not send a paragraph about how upset you are. State the number, attach the evidence, ask for a written answer.

Step 4: Send it to the right place

Send it to the at-fault driver's insurer, addressed to the adjuster handling the property damage claim. Their name and the claim number are on the correspondence you already have. If you do not have a name, call the claims number and ask who handles property damage on that claim, then send it to them.

Send by certified mail with return receipt, and email a copy the same day. You want a date you can prove.

Then write down the date you sent it.

Step 5: What comes back, and what you do

Most answers fall into one of five buckets.

"Here is our offer." It will usually be built from a short formula, often called 17c, which caps the payout at 10 percent of your car's value and then cuts it for damage and mileage. Compare it against your own number. If the gap is small, take it. If it is large, reply with the difference and the evidence for it.

"We need more information." Send exactly what they asked for, nothing else, and restate your number and your response date.

"Your state does not allow this." Check your state page before you accept that. If your state does recognise the claim, say so, point at the rule, and repeat the request.

Silence. Follow up in writing after your response date. Keep it short: you sent a claim on this date, you asked for a reply by this date, you are asking again. A second follow-up two weeks later is reasonable.

"No." A denial in writing is useful, because it tells you what they are disputing. From there you have three routes: send a follow-up letter that answers their specific objection, file a complaint with your state insurance regulator (your state page has the link), or file in small claims court if your number is under your state's limit. A regulator complaint does not pause your filing deadline and does not replace the claim.

Step 6: Keep the file

Keep a copy of everything you send and every date. If this ends up in front of a judge months later, the file is the case.

How long it takes

There is no fixed timetable, and anyone who gives you one is guessing. What you control is the response date you set and how promptly you follow up. What you cannot control is the deadline in your state law, which starts on the date of the crash, not the date of the repair.