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Maryland Diminished Value Accident Claims

Diminished value is calculated by determining a vehicle’s value before a collision and subtracting the vehicle’s value after the accident and repairs. The difference equals the vehicle’s diminished value. Insurance companies like GEICO, Allstate, and State Farm, rarely pay this value in property damage claims.

So when an insurer pays to repair your vehicle, does not – because it cannot with CarFax – restore the car to its pre-loss condition, the insurer must compensate its insured for the diminished value resulting from the irreparable damage you have suffered.

In many personal injury cases, victims get a sneak preview of how the insurance company will treat them in the property damage claim. Insurance companies do not settle serious accident claims – not typically, anyway – until far later down the road when the client has recovered or reached maximum medical improvement (the healing has come as far as it will).

Ripe Conditions for Insurance Companies to Take Advantage

Property damage claims are immediate, giving the victim the first glace of the extent to which the insurance company will completely jerk them around. Loss of value claims are tailor-made for insurance companies not to play it straight.

Insurance companies do not play fair when it comes to the diminished value of the victim’s vehicle. By taking advantage of victims, they save hundreds of millions of dollars a year. We all know that the minute the dealer looks at CarFax. They see the car has been wrecked and automatically give you less on your trade-in. This is the definition of diminished value.

How Much Is My Car Worth After an Accident?

Theoretically, the law is precisely what it should be. Maryland law allows the victim either (1) the cost of repairing the vehicle and the loss of value of the vehicle because of the accident or (2) the fair market value of the car if it is a total loss.

The key word there is “and.” The insurance company is responsible for both. Because a repaired vehicle will likely have a reduced value due to its history of being in a crash. Under Maryland law, compensation for diminished value is required under the “basic principle that the injured party should, insofar as possible, be restored to his original position before the accident.”

So this is simple. There are few tort claims you can solve with a calculator. But this is one of them. It is a simple calculation.

Maryland Diminished Value Law

Specifically, and we flush this out below, the Maryland Court of Special Appeals found in 1971 that if a “plaintiff can prove that after repairs his vehicle has a diminished market value from being injured, then he can recover in addition to the cost of repairs the diminution in market value, provided the two together do not exceed the decrease in value before the repairs.” That is the calculator to prove diminished value on a car, not 17c or KBB diminished value calculators many want to use. The lost value is the actual lost value, not some formula that projects diminution of value without considering the actual vehicle at issue.

So Maryland law is that plaintiffs may recover damages for the diminished value of their property under either trespass, nuisance, negligence, or strict liability.

Insurance Companies Blow Off Diminished Value Claims

Sounds great. The problem is that insurance companies, at least in Maryland, ignore diminished value claims. How? They uniformly refuse to pay its policyholders and third-party claims when the vehicle has sustained damages that decrease the resale value.

Yes, Maryland law allows plaintiffs to bring a diminished value claim. But, practically, the insurance companies understand that most lawyers will not touch diminution of value claims unless they are connected to a severe injury claim (our law firm is undoubtedly guilty of this).

So for most diminished value accident claims, no one is willing to hire an expert and file a lawsuit. So, unless you take them to the courthouse steps and beyond, these diminished value claims are unlikely to get paid.

This problem has become an even bigger deal with the rise of CarFax, which allows everyone to check a vehicle’s accident history quickly. This cuts down the market for potential buyers when you go to sell the car.

How to Beat the Insurance Company?

The most surefire way to beat the insurance company in a diminished value claim is a long way — a lawsuit.

What is the answer? Well, if you have been seriously injured in an accident, your lawyer may be willing to push the ball on your diminished value claim.

If not, there are not a lot of great options. The best is not the one you want to hear: push the insurance company by filing suit on diminished value, let them know you know you need an expert and line one up, and then settle your claim for the best value you can get.

Is a Diminished Value Claim Worth It?

Whether a diminished value case is worth it depends on how unreasonable the insurance company is. The juice is not worth the squeeze if the insurance company is shorting you $100. But if there are thousands of dollars involved, that is a very different story.

How Do I Make a Diminished Value Claim?

Making a diminished value claim is a bit tricky because it is rare that your case will justify retaining a lawyer, and it is unlikely a lawyer would take a diminished value claim on a contingency fee basis.

But for small value claims, most courts make it pretty easy to make a claim, and they relax rules of evidence and other legal technicalities that can make bringing a legal claim a challenge. In Maryland, bringing a lawsuit for less than $5,000 is pretty straightforward.

Does Insurance Pay for Diminished Value?

Some insurance companies pay for diminished value, and others do not. But clearly paying victims less is a path for the insurance companies to make a great deal of money.

What Is the Average Diminished Value Claim?

There are no real statistics that give an average diminished value settlement claim value. No calculator will give you an exact amount for your claim. The vehicle’s appraisal has some subjective elements, so any diminished value calculator you find online is likely to be of limited value.

More globally, some have estimated that insurance companies pay accident victims an average of 10% of what they deserve. So while our lawyers can cite an average, there is no question that insurance companies habitually pay victims less than the true value of the property damage claim.

Diminished Value is Common After a Crash

Can You File a Claim for Diminished Value?

As we discussed a few questions above, you can absolutely file a lawsuit for a diminished value claim. In Maryland, if you file a claim for under $5,000, it is much easier to get by without a lawyer than if the claim is more than $5,000. Why? Maryland relaxes rules of evidence and other administrative hurdles when you file a lawsuit for less than $5,000.

Are Insurance Companies Required to Pay Diminished Value?

Insurance companies are required to pay the diminished value of your vehicle from a car accident, at least in Maryland and most states. The problem is that to make them pay what you are owed, you are often required to file a lawsuit.

Get Information on Hiring a Lawyer to Fight the Insurance Companies for You

We handle serious injury Maryland auto accidents and have prevailed at trial in hundreds of car accident cases.

Diminished Value

Our accident lawyers have also successfully settled thousands of cases for clients injured in automobile accidents, recovering millions of dollars in compensation for victims by settlement or trial in 2017. If you or someone you love has been seriously injured or killed in a car accident, call us at 800-553-8082 or click here for a free consultation. (Please note: we do not handle property damage only or minor injury claims.)

Diminished Value Law Around the Country

We have pulled some of the laws around the country on the issue of diminished value claims. As you will see, the results are mixed:

Good Cases

  • Maryland: Fred Frederick Motors, Inc. v. Krause, 12 Md. App. 62 (1971) (This case is the primary source of Maryland’s diminished value law. Every car accident lawyer should know this case. Maryland’s intermediate appellate court held that the owner of a damaged car may recover any reduction of the vehicle’s value after the vehicle has been repaired as well as it reasonably can be repaired. This means that the correct calculation of a measure of loss caused by an accident is the difference in the car’s market value immediately before the crash and the combined amount of its value immediately after being repaired.)
  • Maryland #2: Admiral Ins. Co. v. John Stromberg & Assoc., 77 Md. App. 726, 738, 551 A. 2d 923,929 (1989). (For the definition of the word replace, “generally defined to mean the ‘restoring to a former condition,’ or ‘the providing of an equivalent for.’”)
  • Maryland #3: Taylor v. King, 241 Md. 50 (1965). (Maryland’s rule on the measure of damages on vehicles that are not a total loss is “is the reasonable cost of the repairs necessary to restore it to substantially the same condition that it was in before the injury, provided the cost of repairs is less than the diminution in market value due to the injury…and when the cost of restoring a motor vehicle to substantially the same condition is greater than the diminution in market value, the measure of damages is the difference between its market value immediately before and immediately after the injury.”
  • Maryland #4: Berry v. Queen, 469 Md. 674 (2020). (In Maryland, there are guidelines for assessing property damage to a car that is not completely destroyed. The damages should equal the sensible cost of necessary repairs to bring the vehicle back to a state very close to its pre-damage condition. This is only valid if the repair costs do not exceed the depreciation in the market value caused by the damage. On the other hand, if the expenses needed to restore the vehicle to a condition similar to its state before the incident surpasses the market value decrease, the damages measure changes. In such cases, the damages are calculated as the disparity in the vehicle’s market value immediately before the incident compared to immediately after. It is also worth noting that the calculation of damages may account for a reasonable amount reflecting the loss of use of the vehicle. This allowance acknowledges the inconvenience and potential costs the owner bears while the vehicle was unavailable for use.)
  • Washington: Moeller v. Farmers Insurance (automobile insurance policy provided coverage for the diminished value of a fully repaired car because the average insurance consumer would read Farmers’ policy to provide coverage of equal value to the actual loss, which includes diminished value)
  • Ohio: Rakich v. Anthem Blue Cross (reversed the lower court finding residual diminution in value. The court said that the claim does not overlap the cost of repairs “because it is calculated based on a comparison of the value of the property before and after repairs, i.e., excluding injury compensated by damages for the cost of repair.” Court noted in its opinion similar findings in Arizona, Colorado, Florida, Iowa, Louisiana, Mississippi, New Jersey, Oklahoma, South Carolina, Virginia, West Virginia, and the District of Columbia.)

Bad Cases

  • Massachusetts: Given v. Commerce Insurance Company (court rejected diminished value claim saying: “We will not torture the plain meaning of the terms ‘repair’ and ‘replace’ to encompass ‘repair’ or ‘replace[ment]’ of damage caused by stigma, a form of damage that, by definition, defies remedy by way of ‘repair’ or ‘replacement.”)
  • Tennessee: Grimes v. Hancock (reduction in value that’s calculated after a vehicle has been repaired is not acknowledged as a valid component of permissible damages)
  • South Dakota: Culhane v. Western National Mutual Insurance Company (court disagreed insurer was obligated to pay, citing similar laws in Florida, Louisiana, Maine, and Massachusetts)

Maryland Expert Witnesses for Diminished Value Claims in Maryland

A diminished value calculator that computes the exact value of the loss on the vehicle that a court could rely upon would make these claims a lot easier to manage. But there is no formula for these appraisals. The loss of value depends on the type of car, the type of collision, and a host of other facts.

Keep in mind that there is arguably a flaw in using a blue book calculation. Some argue that 90% of cars today are sold below blue book value. Why? It is common practice for trade-ins to take rebates, incentives, and other discounts available to the automotive dealership and add them to the trade-in value of a car during a new car purchase.

This artificial appraisal inflates the trade-in value of the car. Why do dealers do this? Buyer assumes they are getting a better deal when they get more for their trade-in. It gives the seller credibility that they are fair. The reality is that they are just giving you more on the trade-in and charging you more on the car. So this reality improperly inflates the value of cars. Be prepared for this argument with the insurance adjuster and at trial.

You may need an expert to bring a diminished value claim to appraise your vehicle and to calculate the inherent loss to the Plaintiff’s vehicle following the crash. This is the best way to prove a diminished value claim. This is a partial list of experts who provide this type of estimation of loss testimony in Maryland

  • Reed Appraisers: 301-946-6116
  • Collision Consulting (Randy Williams): 443-324-4476
  • Randy Cole: 410-207-6294

*Note: Miller & Zois does not endorse these experts. We are merely passing along the names of these experts who may be able to provide evidence that your vehicle is diminished in value because of its repair history.

Lawsuit Language for Diminished Value Claim


  1. Plaintiff incorporates the above-referenced paragraphs as if the same were fully set forth herein.
  2. Defendant’s negligence caused substantial and extensive property damage to Plaintiff’s 2019 Honda Accord (“Plaintiff’s car”).
  3. On the date of this collision, Plaintiff’s car had an odometer reading of 742 miles and it had not been previously damaged.
  4. The damage to Plaintiff’s car was repaired for $18,398.16 and took at least 45 days to repair.
  5. As a result of Defendant’s negligence, the resale value of Plaintiff’s car has been significantly diminished because future buyers will know of the damage to the vehicle, and the price will reflect this car crash.
  6. The car is brand new. There has been no prior damage.
  7. Plaintiff has not been reimbursed for her vehicle’s diminished resale value loss.

WHEREFORE, Plaintiff, demands judgment against Defendant Miner for Ten Thousand Dollars ($30,000.00) in compensatory damages, plus interest and costs.

Maryland Law on Diminished Value Claims

A diminished value claim is permitted in Maryland if the sum of the diminution in value plus the repair costs is less than the difference between the vehicle’s pre-accident value and its post-accident salvage value.

Accordingly, a Maryland plaintiff can claim the smaller of: (1) the sum of the repair costs plus any decrease in the value of that vehicle after the repairs and (2) the difference between the vehicle’s value before the car crash and its value after the accident before any repairs (the salvage value).

If you are taking one of these cases to trial, bring everything relevant to the value of the vehicle, including

  • the blue book value and evidence of the value of this vehicle in this jurisdiction
  • recent auction sales of the same vehicle
  • warranty (even if expired)
  • purchase records
  • service records
  • technical service bulletins regarding the vehicle

More on Property Damage Claims

Dealing with the Insurance Company

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