Diminution in Value

When a vehicle is in an accident, the damage can impact the vehicle's value by reducing the resale price. Diminished value can appear in first- and third-party claims.

Adjusters should look closely at policy language for first-party diminished value claims as many insurers contend that the loss of value is an indirect cost and not covered by the policy. For third-party claims, the loss involves a lawsuit or civil liability. While there are several ways to determine diminished value, the most common way is to deduct the difference between market value before and after the accident.

There are two types of diminished value for vehicles:

1. Immediate: the immediate loss of value after an accident and before repairs are started.

2. Inherent: the lasting loss of value after an accident caused by the alleged "black mark" on the car since it has been in an accident.

This chart is current as of the date I wrote it, but adjusters should be familiar with their state’s rules. I cannot guarantee the accuracy of the list. Because laws and regulations can change without notice, an attorney should be contacted if there are any questions regarding this chart. These materials are provided for informational and educational purposes only and do not constitute legal advice or legal opinions because I am not an attorney.

Alabama

Alabama first-party insurers may not be obliged to pay the insured for the difference between the vehicle’s value before the accident and the vehicle’s value after the necessary repairs. First-party claimants are entitled to recover only the cost of repair or replacement if the policy insurance dictates that the insurer’s liability for loss or damage shall not exceed the repair or replacement cost of the vehicle.

It appears that Alabama has no court decisions about recovery allowed for diminution in value of a damaged vehicle in a third-party claim.

Alaska

Alaska courts use diminution in value for first-party claimants in determining the amount owed in an auto loss claim. However, there are no current cases dealing with a claim for the loss of value of an auto repair by an insurer.

Alaska does not directly allow diminution in value damages for third-party claims but it does recognize the claim in other jurisdictions. The courts acknowledged that Restatement (Second) of Torts § 928 provides that if after repair, the damaged vehicle was not restored to its original value, recovery is allowed for both costs of repairs and the difference in market value before the damage and after the repair.

Arizona

Arizona does not acknowledge first-party recovery in the case law Johnson v. State Farm Mut. Auto. Ins. Co., 754 P.2d 330 (Ariz. App. 1988) because the courts have identified that an insured’s measure of damages is not the difference in the market value of the auto immediately before and after the accident.

For third-party claims in Arizona, the courts held that the measure of compensation to the insured may include the cost of repair and proven residual diminution in fair market value. When the vehicle is repaired or restored, the measure of damages is the cost of repair including the difference between the value of the property before the damages and the value after repairs, and its loss of use.

Arkansas

Arkansas courts ruled that in first-party claims, the measure of damages to personal property is the difference in the fair market value of the property immediately before and after the accident and that the reasonable cost of repairs may be considered in determining this difference.

For third-party claims, Arkansas courts held that the measure of damages is the difference in the market value of the vehicle immediately before and after the accident. But when proving damages for a vehicle, not a total loss, the difference in fair market value may be determined by the reasonable cost of repairing the damaged property. If the repairs do not restore the vehicle to its former condition and value, the appropriate measure of damages is the difference in value before the accident and after the accident and repairs.

California

Policy language dictates first-party claimants’ recovery in California. The courts believed that if the damaged vehicle was repaired to its pre-accident condition, an insurer is not required to pay for any loss of value to the vehicle, which can happen after a seriously damaged vehicle is fully repaired. Further, if a policy covers “property damage” which means any physical damage to tangible property including destruction or loss of its use, even the diminution value is not a form of physical damage, it is an accepted way of measuring damage and hence, should be paid.

There are no court decisions yet allowing recovery for diminution in value of a damaged vehicle in a third-party claim in California, but it seems that the new jury instruction for auto property damage is allowing to award it. Third-party property damage recovery is limited to the difference between the vehicle’s fair market value before the loss and its value after the loss. The California Jury Instruction (CACI-3903J, 2017) states that if after the vehicle repair its value is assessed less than its pre-accident state, even if the total cost of repairs is more than its pre-accident value, the total amount rewarded may not be more than the vehicle’s value before the accident.

Colorado

Colorado’s first-party claimants are covered for diminution value. The case law states that when the policy language requires, the insurer is responsible to provide an insured with the means to acquire a comparable vehicle through repair, replacement, and or compensation.

For third-party claims in Colorado, the courts have held that the measure of damage is the difference between the vehicle’s value immediately before and after the accident, including the cost of reasonable efforts to restore it. Further, the courts acknowledged the evidence of the diminution in value of the defendant's vehicle because such diminution is considered an element of damage.

Connecticut

For first-party claims, it depends on the discretion of Connecticut courts to select the repair measure which stands in exchange for diminution in value caused by damage to property. To date, there are no cases available dealing with insurance recovery as differentiated from tort recovery.

Third-party claimants in Connecticut are entitled to recover the reasonable repair costs and any residual diminution in value.

Delaware

For first-party claims, Delaware Supreme Court decided that “repair and replace” for vehicle damage does not include payment for diminution of value.

It appears that Delaware has no court decisions about recovery allowed for diminution in value of a damaged vehicle in a third-party claim.

District of Columbia

For first-party claims, the District of Columbia courts allowed for a tort remedy but failed to address the issue when it involves the coverage available under an insurance policy. There were authorities mentioned who determined that recovery may be allowed for both the reasonable cost of repair and the residual diminution in value after repair, provided that the award does not exceed the gross diminution in value.

It appears that the District of Columbia has no court decisions about recovery allowed for diminution in value of a damaged vehicle in a third-party claim.

Florida

The Courts in Florida held that for first-party claimants whose policy language covers diminution in value, and the insurer repaired or replaced the damaged vehicle to its pre-accident condition, the insurer is not required to compensate the insured in money for any diminution in market value.

Third-party claimants in Florida are entitled to diminution coverage. The courts held that the cost of the repairs made plus the diminution in value will generally be the proper measure of damages. The claimant should present proof in addition to the cost of repairs, that he suffered the additional damage of diminution of value by the vehicle during the accident. It is not required that the vehicle be sold before damage for diminished value is realized and can be recovered.

Georgia

The Georgia Supreme Court determined that first-party diminution in value claims require insurers to pay the diminished value, plus the vehicle’s repair cost, even if the insured does not make a claim for the diminished value as in the case of State Farm Mut. Auto. Ins. Co. v. Mabry, 556 S.E.2d 114 (Ga. 2001). The court held that State Farm is responsible to assess all first-party physical damage claims for any proof of diminution in value.

Third-party claimants in Georgia are required to present proof showing the difference between the vehicle’s fair market value before and after the accident or evidence of a reasonable value of labor and material used for repairs together with loss of use, plus the value of any permanent damage in the value of the vehicle.

Hawaii

Hawaii courts enforce diminution in value provision for first-party claimants and were used to identify value for the purposes of judgment and to establish values for loss to real property.

It appears that Hawaii has no court decisions about recovery allowed for diminution in value of a damaged vehicle in a third-party claim.

Idaho

For first-party claimants, Idaho courts have addressed diminution by speaking to the requirement, in a suit against a title company, to show some diminution in value of the real property. To date, there are no court decisions regarding recovery for diminution in value of a damaged vehicle in a first-party claim.

It appears that Idaho has no court decisions about recovery allowed for diminution in value of a damaged vehicle in a third-party claim.

Illinois

Illinois courts first-party claims for diminution in value held that the term “like kind and quality,” means “sufficient to restore a vehicle to its pre-accident condition.” Use of non-OEM (Not the Original Equipment Manufacturer) parts does not necessarily mean breaking the “like kind and quality” promise.

For third-party claimants, the courts in Illinois stated that the measure of damages for a repairable property is normally the cost of repair while the owner is deprived of using it due to the repair. If the property is worth less after it is repaired than its value before the injury, the measure of damages is the difference in the market value before the injury and in its repaired condition in addition to the reasonable cost of repairs.

Indiana

Indiana Supreme Court has held that that diminution in value may not be recovered by first-party claimants if policy language does not provide for it. The insurer may either pay the actual cash value of the vehicle or the amount necessary to repair, not some combination of the two.

A third-party claimant in Indiana is entitled to recover both the cost of repair and residual diminished value. It requires proof of a vehicle’s fair market value after the repair is completed. Also, Indiana courts have implemented measuring of damages in the Restatement (Second) of Torts, which states that the fundamental measure of damages where personal property is damaged, but not destroyed, is the reduction in fair market value caused by the negligence of the tortfeasor.

Iowa

In 2004, Iowa’s Insurance Adjustment Bureau voided the first-party claims for diminished value policy provisions. See Admin. Code R. § 191- 15.43(507B).

For third-party claims in Iowa, diminution value may be recovered if the claim is backed up by sufficient evidence and expert testimony. The amount of recovery depends on the sound judgment of the court.

Kansas

Kansas law on first-party claims (10th Circuit decision) states that a commercial inland marine policy covers post-repair diminution in value of a dealer’s vehicle damaged by hail and such coverage was not defeated by “loss of market” exclusion.

Kansas’ third-party claim of diminution in value states that “When the repair of the vehicle does not restore to its original condition and value, the repair cost together with the difference in value before the accident, might be considered a fair measure of the loss sustained.

Kentucky

In Kentucky, first-party insurers are obliged to restore the physical condition but not the value of the damaged vehicle. This provision was supported by the Court of Appeals in Tomes v. Nationwide Ins. Co., 825 S.W.2d 284 (Ky. App. 1991) and General Accident Fire & Life Assurance Corp. v. Judd, 400 S.W.2d 685 (Ky. 1966).

Kentucky’s Court of Appeals in 2018 enforced the diminution in value rule in dealing with real property and third-party vehicle damages. The amount of recovery is the difference in the value of the property before the accident occurred, and the value immediately after the repair is completed.

Louisiana

Louisiana Court of Appeals required proof of diminution from a first-party claimant. The court held that diminution in value of a vehicle involved in an accident is an element of recoverable damages if there is sufficient evidence. Where the measure of damages is the cost of repair, additional damages for depreciation may be recovered for the diminution in value due to the accident. See Defraites v. State Farm Mut. Auto. Ins. Co., 864 So.2d 254 (La. App. 2004).

Louisiana’s statute L.S.A. § 2800.17 (liability for the diminution in the value of a damaged automobile) regulates third-party liability for the diminution in the value of a damaged vehicle. If the insured can provide proof that the vehicle damage was repaired to its pre-loss condition and its fair market value is less than its value before it was damaged, he is entitled to recover as additional damages an amount equal to the diminution in the value of the vehicle.

Maine

Maine’s case of a first-party claim Hall v. Acadia Ins. Co., 801 A.2d 993 (Me. 2002) delineates that the insurer’s liability as per the policy language is limited only to a loss that can be repaired. Since diminution in value cannot be repaired, it was not compensated. It is based on the principle that a value that cannot be restored is uninsurable. An insured or subrogated insurer may recover the difference in the value of the vehicle before and after the accident.

It appears that Maine has no court decisions about recovery allowed for diminution in value of a damaged vehicle in a third-party claim.

Maryland

Maryland’s first-party claim for diminution of value is entitled to recovery. The measure of damages in a case involving damage to a vehicle is the difference between the market value of the vehicle immediately before the accident and its market value immediately afterward. See Reichs Ford Road Joint Venture v. State Roads Comm’n of the State Hwy. Admin., 880 A.2d 307 (Md. 2005).

Maryland courts have determined that if a third-party claimant can provide proof that after repairs his vehicle has a diminished market value, then he can recover the diminution in value in addition to the cost of repairs, on the condition that the two together do not exceed the diminution in value prior to the repairs. See Fred Frederick Motors, Inc. v. Krause, 277 A.2d 464 (Md. 1971).

Massachusetts

For first-party claims in Massachusetts, the usual standards of contract interpretation apply. For years, only the repair cost to restore a vehicle’s pre-accident condition is covered. See Given v. Commerce Ins. Co., 440 Mass. 207 (Mass. 2003). The Division’s position in Roth v. Amica Mut. Ins. Co., 796 N.E.2d 1281 (Mass. 2003), was that the standard auto insurance policy does not provide coverage for inherent diminished value and has no intention to provide such coverage. To date, there are no statutes or regulations requiring insurers to pay claims for diminished value, or rates to include a premium charge for diminished value.

Diminution in value of third-party tort damage is recoverable in Massachusetts. The court agreed with the plaintiffs in the case of McGilloway v. Safety Insurance Company, 174 N.E.3d 1191 (Mass. 2021) in their demand to collect diminution in value damages from the defendants under part 4 of the standard policy.

Michigan

Michigan Courts do not allow first-party claimant recovery since the insurer’s obligation under auto policies is to “repair or replace” only and does not require payment for diminution in value of a vehicle resulting from an accident. See Driscoll v. State Farm Mut. Auto. Ins. Co., 227 F. Supp.2d 696 (E.D. Mich. 2002).

It appears that Michigan has no court decisions about recovery allowed for diminution in value of a damaged vehicle in a third-party claim.

Minnesota

Minnesota’s first-party claimants are covered as long as the policy language requires insurers to compensate the insured for the loss of value (depreciation) not fully compensated for by repair. See Ciresi v. Globe & Rutgers Fire Ins. Co., 244 N.W. 688 (Minn. 1932).

It appears that Minnesota has no court decisions about recovery allowed for diminution in value of a damaged vehicle in a third-party claim.

Mississippi

For first-party claims in Mississippi, the courts impose that if there is a loss in actual market value after the vehicle repair, the diminution in value is added to the cost of repairs. The measure of loss is the difference between its reasonable market value before the accident and its reasonable market value after all the repairs.

Mississippi’s third-party claimants may recover the cost of vehicle repair in addition to the remaining diminution in value after the repairs, but the amount should not exceed the total diminution in pre-tort value. Recovery for residual diminution in value is permitted, but uncertain if the owner’s testimony can be used as sufficient proof. See Regency Nissan, Inc. v. Jenkins, 678 So.2d 95 (Miss. 1995).

Missouri

Missouri’s first-party claimants are governed by their policy language. If it states that the insurer’s liability is limited to either the actual cash value of the auto or the repair cost or replacement of a comparable vehicle, diminution in value is not a covered loss. However, the Missouri Court of Appeals authorizes that if the insurer after the repairs failed to restore the vehicle to its pre-accident condition, the insured can recover damages in an amount equal to the difference between the reasonable market value of the vehicle immediately prior to the accident and its reasonable market value after the repairs.

Missouri’s statute on third-party claims defines the measure of damages as the difference between the market value of the vehicle before the accident and its value after the accident. It also includes the cost of repairs and the difference between the market value of the car before the collision and its value after the repairs. Other items of loss, such as diminution of damage, and loss of use, would be added to the total damage suffered by the owner.

Montana

Policy language dictates Montana’s first-party claimants. Where the policy limits the insurer’s liability to the actual cost of replacement of the damaged property, “replacement” means the restoration of the property to its pre-injury state and this can either be achieved through repair or replacement of damaged parts. “Complete restoration” happens only if there has been a diminution in value after the vehicle repair. Courts have varied interpretations of similar limitation clauses and this will continue to happen if the policies are not clear about the diminution coverage.

It appears that Montana has no court decisions about recovery allowed for diminution in value of a damaged vehicle in a third-party claim. There is one case law where the Supreme Court implied that third-party recovery of inherent diminution in value damages is not ready for settlement yet because the Court has not decided whether insurers in Montana have an obligation to pay residual diminished value claims. See Hop v. Safeco Ins. Co. of Illinois, 261 P.3d 981 (Mont. 2011).

Nebraska

Nebraska’s rule on first-party claims specifies that the cost of the repairs made plus the diminution in value of the vehicle will be the proper measure of damages. Loss of market value is only recoverable when the vehicle is not repaired. See Chlopek v. Schmall, 396 N.W.2d 103 (Neb. 1986).

It appears that Nebraska has no court decisions about recovery allowed for diminution in value of a damaged vehicle in a third-party claim.

Nevada

It appears that Nevada has no court decisions about recovery allowed for diminution in value of a damaged vehicle both in a first-party and third-party claim.

New Hampshire

It appears that New Hampshire has no court decisions about recovery allowing for diminution in value of a damaged vehicle both in a first-party and third-party claim.

New Jersey

New Jersey’s first-party claims depend on policy language. Early case law says that the actual cash value of an auto loss is established as fair market value and the insured provided proof that even after the repair, the vehicle has depreciated, the claimant can recover the cost of repair plus the diminution in value if any. See Fanfarillo v. East End Motor Co., 411 A.2d 1167 (N.J. App. 1980). If the policy clearly ruled out coverage for diminution of value and the insurer’s liability is limited to the cost of restoring the damaged vehicle to its same pre-accident condition, then the insurer is not liable to cover any inherent diminished value caused by conditions or defects that are not subject to repair or replacement.

New Jersey courts acknowledge third-party claims for diminution in value. They define the measure of damages as the difference between the reasonable market value of the vehicle before and after the accident and the cost of repair and the depreciated value of the vehicle due to the accident. The amount though should not exceed the diminution in market value and does not exceed the pre-accident market value of the vehicle. See Fanfarillo v. E. End Motor Co., 411 A.2d 1167 (N.J. Super. 1980).

New Mexico

First-party claimants in New Mexico are governed by their policy language. The Court of Appeals has followed the majority trend of declining recovery for the diminished market value under the terms of the claimant’s insurance policy. See Davis v. Farmers Ins. Co. of Ariz., 142 P.3d 17 (N.M. App. 2006).

New Mexico’s third-party claimants are entitled to recover diminution in value for vehicle damages. The court has held that the insured should be fully compensated and the award should be equivalent to the idea of making the injured person whole. It also mentions that the proper measure of damages will be whichever is less - repair costs plus depreciation or reduction in market value. See Hubbard v. Albuquerque Truck Ctr. Ltd., 125 N.M. 153 (1998).

New York

First-party claimants in New York are entitled to the diminution in value recovery. This decision was based on the case law Edwards v. Maryland Motor Car Ins. Co., 197 N.Y.S. 460 (N.Y. App. Div. 1922) where the court held that diminution in value is damage included within the clause of the policy insuring the claimant against direct loss or damage by the peril of theft, robbery, or pilferage. The policy provisions state that the insurer may decide to “repair, rebuild, or replace the property lost or damaged with a comparable kind and quality. The court mentions that this case allowed recovery for diminished value by finding coverage in another section of the insurance policy and not due to any obligation to repair the vehicle with like kind and quality.

New York’s third-party claimants can recover diminution in value as decided by the Court in the case law Miller v. Sanchez, 6 Misc.3d 479, 789 N.Y.S.2d 850 (N.Y. City Civ. Ct. 2004). The court accepted the difference in value as the proper measure of tort damages. If the type of vehicle appreciates in value, like rare and unique branded vehicles, or brand new, third-party diminution of value damages are recoverable in addition to the cost of repairs even if the repairs restore the vehicle to its pre-accident condition.

North Carolina

North Carolina courts support first-party claimants. The court held that the measure of damages is the fair market value of the vehicle immediately before the accident and the fair market value after the accident. To determine the diminished value, North Carolina employs different methods like the ClaimCoach.com system and the Classic Car Appraisal Service (Don Peterson) methodology and the 17(c) formula. The statute N.C. Gen. Stat. Ann. § 20-279.21(d)(1) outlines the procedure for an insured to have a first-party diminished value claim. It provides that, if the appraisal of each party differs by more than $2,000 or 25% of the vehicle’s fair market retail value, then each party selects an independent appraiser to evaluate the loss.

For third-party claims in North Carolina, the court defines the measure of damage for injury to personal property as the difference between the market value of the property immediately before the injury and the market value immediately after the injury. Claimants should provide evidence of the reasonable value of repairs to a damaged vehicle, and the reasonable market value of the vehicle as repaired, to show the difference in its value before and after the accident. North Carolina Jury Pattern provides that “the plaintiff’s actual property damages are equal to the difference between the fair market value of the property immediately before it was damaged and its fair market value immediately after it was damaged. The statute on Property Damages--Diminution in Market Value., N.C. Pattern Jury Inst. - Motor Veh. § 106.62. 11 N.C. Admin. Code 4.0421(5) also states that if a release of claim is executed by a third-party claimant, involving a repair to a motor vehicle, it shall not bar the right of the third-party claimant to promptly assert a claim for diminished value, which diminished value was directly caused by the accident and which diminished value could not be determined or known until after the repair or attempted repair of the motor vehicle.

North Dakota

It appears that North Dakota has no court decisions about recovery allowed for diminution in value of a damaged vehicle both in a first-party and third-party claim.

It appears that North Dakota has no court decisions about recovery allowed for diminution in value of a damaged vehicle both in a first-party and third-party claim. See the case of Sullivan v. Pulkrabek, 611 N.W.2d 162 (N.D. 2000) for damage to a property claim.

Oklahoma

In Oklahoma’s first-party claim case law, the court has held that unless the accident resulted in a total loss of the vehicle, the claimant’s measure of recovery was the difference between the fair market value of his vehicle in the condition in which it was immediately prior to the collision, and its value thereafter. If the accident resulted in a total loss of the vehicle, the measure of recovery is the fair market value in the condition in which it was immediately before the accident. See Phoenix Ins. Co., Hartford, Conn. v. Diffie, 270 P.2d 634 (Okla. 1954).

Oklahoma statute Okla. Stat. Ann. tit. 23, § 61 on third-party claims provides that the measure of damages is the amount that will compensate for all the loss immediately after the accident, whether it was anticipated or not. In cases where the insured failed to restore the property to its pre-accident condition, the cost of repairs made plus post-repair diminution in value of the property will ordinarily be the proper measure of damages. See Brennen v. Aston, 84 P.3d 99 (Okla. 2003).

Ohio

Ohio’s first-party claimants may or may not be compensated for the diminution in value of their damaged vehicle depending on policy language. In the case law Nationwide Mut. Ins. Co. v. Shah, 2004 Ohio 1291 (Ohio App. Dist. 5, 2004); Kent v. Cincinnati Ins. Co., No. CA2001-04-100 (Ohio App. Dist. 12, 2001), the court has held that the insured was not allowed to recover the diminution in value of a damaged vehicle because it was not discussed in the insurance policy and that there was no cause of action for the diminished value of the vehicle.

In Ohio, third-party claimants may recover damages. When the insured provides proof that the value of his vehicle after the repair is less than its pre-accident value, he or his subrogated insurer may also recover the residual diminution in value in addition to the cost of repair, provided the amount of recovery does not exceed the difference between the market value of the vehicle immediately before and after the accident.

Oregon

The Oregon Supreme Court supports first-party claimants. It has held that the insured was entitled to the difference between the pre-loss and post-loss value of the vehicle. Complete restoration can occur only if there is a diminution in value after its repair. See Dunmire Motor Co. v. Oregon Mut. Fire Ins. Co., 114 P.2d 1005 (Or. 1941). In a more recent case, the Oregon Supreme Court found that “repair” in an auto insurance policy requires the insurer to restore the vehicle to its pre-loss condition either by paying cash for repair of the vehicle, or replacement of the vehicle. If the insurer cannot restore the vehicle to its pre-loss condition, the resulting diminution of value is a loss payable to the insured under the insurance policy. See Gonzales v. Farmers Ins. Co. of Oregon, 196 P.3d 1 (Or. 2008).

In a third-party claim in Oregon EAM Advertising Agency v. Helies, 954 P.2d 812 (Or. App. 1998), the Court of Appeals acknowledged possible acceptance of evidence of diminished value but found that such evidence was not presented.

Pennsylvania

For Pennsylvania’s first-party claimants, the Supreme Court ruled that with regard to remedial damage to a property, a claimant may recover only the cost of repair or restoration excluding diminution in value of the property. The court also stated in a separate case that it was not familiar with any circumstances where an insurer paid the insured for diminished value. See Lobozzo v. Adam Eidemiller, Inc., 263 A.2d 432 (Pa. 1970); Munoz v. Allstate Ins. Co., No. 9906-2855 (Pa. Comm. Pl. 1999).

Rhode Island

A first-party insurer was denied by Rhode Island’s Superior Court in regard to a diminution in value since the policy language does not clearly define whether “the cost of repair or replace the property with other of like kind and quality” includes damages for the inherent diminished value of a vehicle resulting from an accident. See Cazabat v. Metropolitan Property & Casualty Ins. Co., 2000 WL 1910089 (R.I. Super. Ct. 2000).

It appears that Rhode Island has no court decisions about recovery allowing for diminution in value of a damaged vehicle both in a first-party and third-party claim.

South Carolina

For first-party claims in South Carolina, the Supreme Court held that where the policy language clearly “expressly limits coverage to the lesser of the actual value or the cost of repair”, the insurer is not obliged to pay for diminished value when the cost of repair is chosen. Likewise, the Court would not consider the cost of repair as an additional requirement to also pay for diminished value since, since doing so would render the limitation provision pointless. See Schulmeyer v. State Farm Fire & Cas. Co., 579 S.E.2d 132 (S.C. 2003).

Third-party claimants in South Carolina are entitled to recovery of diminution in value. The court has held that the cost of the repairs plus the diminution in value of the property will ordinarily be the proper measure of damages. See Newman v. Brown, 228 S.C. 472, 477, 90 S.E.2d 649, 652 (1955).

South Dakota

In a case of a first-party claim in South Dakota, the Supreme Court followed the majority rule and did not allow recovery of diminished value after the full repair of a vehicle. The decision was based on the clear language of the insurance policy. See Culhane v. Western Nat’l Mut. Ins. Co., 704 N.W.2d 287 (S.D. 2005).

It appears that South Dakota has no court decisions about recovery allowed for diminution in value of a damaged vehicle both in a first-party and third-party claim.

Tennessee

In a first-party claim in Tennessee, the Court of Appeals refused to compensate for the diminution in value because the policy language clearly limits the insured to vehicle repairs only. See Black v. State Farm Mut. Auto. Ins. Co., 101 S.W.3d 427 (Tenn. App. 2002); and Senter v. Tennessee Farmers Mut. Ins. Co., 702 S.W.2d 175 (Tenn. App. 1985).

Tennessee’s statute on third-party claims states that the measure of damages is either the repair costs or the difference in market value immediately before and after the accident. It appears that there is no specific case law showing that a diminution in value measured after the repair is an accepted element of allowable damages in Tennessee.

Texas

Texas courts do not allow recovery of diminution in value for first-party claimants. Where an insurer has completely repaired or replaced the vehicle to a comparable kind and quality, the diminution in value cannot be considered a component part of the cost of repair or replacement. The Texas Department of Insurance Bulletin B-0027-00 (2000) has also held that an insurer is not required to pay a first-party claimant for diminished value when the vehicle is completely repaired to its pre-damage condition. The language of the insurance policy does not require payment for, or refer to, diminished value.

It appears that Texas has no court decisions specifically allowing recovery of diminution in value of a damaged vehicle for a third-party claim. The insured or subrogated insurer may sue for either diminution of market value or cost of repair to a damaged vehicle. See Jones v. Wallingsford, 921 S.W.2d 463 (Tex. App. 1996). Texas law does not allow “double” recoveries. Under certain situations, an insured may recover for both diminutions in value and cost of repairs, if there is no double recovery. Diminution in value does not duplicate the cost of repairs if the diminution is based on a comparison of the original value of property and value after the repairs. The Department of Insurance Bulletin B-0027-00 states that an insurer may be required to pay a third-party claimant for any loss of market value of the claimant’s automobile, regardless of the completeness of the repair. This does not apply to vehicles that are considered a total loss.

Utah

It appears that Utah has no court decisions about recovery allowed for diminution in value of a damaged vehicle both in a first-party claim.

In Utah’s case of a third-party claim, Metcalf v. Mellen, 192 P. 676 (Utah 1920), the insured was entitled to recover the difference in the market value of his vehicle immediately before and after the injury. He was compensated not only for the reasonable cost of repair but also for any depreciation in market value after repairs were completed.

Vermont

Vermont’s statute on first-party claims is that the insurer must pay for the diminished value of the vehicle. Insurers must consider all relevant information provided by an insured or third-party claimant regarding a claim for diminution in value. Although the Department has not authorized a specific method for adjusting such claims, insurers must adopt a fair and equitable process and standards for this type of claim. See VT Bulletin 164 (8-10-11).

For third-party claims in Vermont, the measure of damages to a vehicle is based on its fair market value before the accident minus its fair market value after the accident. In determining the difference between the value of the vehicle before and after the accident, or its depreciation as a result of injury, the insured should present evidence as to the reasonable cost of necessary repairs and as to the value of the vehicle after the repair.

Virginia

The Virginia Supreme Court declined to reimburse a first-party claimant for the loss of his new car warranty because the policy language does not include the diminution in value provisions. See Bickel v. Nationwide Mut. Ins. Co., 143 S.E.2d 903 (Va. 1965).

Virginia third-party claimants are entitled to recovery when the vehicle was damaged but not totally destroyed and repair is needed; the measure of damage is based on the repair cost and any diminution in the vehicle’s market value after the repair.

Washington

In the case of Washington’s first-party claim Moeller v. Farmers Ins. Co. of Washington, 267 P.3d 998 (Wash. 2011), the court ruled that coverage provision includes diminished value loss and the limits of liability and payment of loss provisions do not clearly exclude it.

It appears that Washington has no other court decisions, statutes, or regulations regarding allowing or disallowing claims for diminution in value of a damaged vehicle in a third-party claim. Washington Practice Series, Pattern Jury Charges discusses only the measure of damages to personal property which is lesser of the following: 1) The reasonable value of necessary repairs to any property that was damaged; or 2) The difference between the fair cash market value of the property immediately before the occurrence and the fair cash market value of the unrepaired property immediately after the occurrence.

West Virginia

It appears that West Virginia has currently no statute authorizing first-party claims for diminution in value under auto policies. An informational letter from the West Virginia Offices of the Insurance Commissioner in response to Ellis v. King, 400 S.E.2d 235 (W.V. App. 1990) outlined the policy exclusions for diminished value, either for first-party or third-party claims.

For third-party claims, the West Virginia Supreme Court allows recovery if the insured can show proof of diminution in the vehicle’s value based upon structural damage after repair. However, the total shall not exceed the market value of the vehicle before it was damaged

Wisconsin

Wisconsin’s first-party claims are considered where policy language allows insurers to repair vehicles even if the possible repairs would not restore to their pre-accident market value. Insurers are not obliged to pay for diminution value following adequate repairs. Wisconsin Court of appeals decided in favor of the insurer since policy language only required the insurer to pay for all necessary repairs which did not mean the insurer had to restore the vehicle to its pre-loss value. See Wildin v. Am. Family Mut. Ins. Co., 638 N.W.2d 87 (Wis. App. 2001).

Wyoming

It appears that Wyoming has no court decisions about recovery allowed for diminution in value of a damaged vehicle in a first-party claim. In the case of Miller v. Campbell County, 901 P.2d 1107 (Wyo. 1995), the court found that diminution in value was an element of damage in an inverse condemnation case.

It appears that Wyoming has no court decisions about recovery allowed for diminution in value of a damaged vehicle both in a first-party and third-party claim.