Car insurance glossary
What is diminished value?
Diminished value is a claimed reduction in a vehicle's market value after it has been damaged and repaired.
Also called: loss in vehicle value
Glossary date: May 11, 2026
How it works
Availability depends on state law, fault, policy language, vehicle facts, and proof. First-party and third-party claims can follow different rules.
Example
Two similar cars are offered for sale, but one has a major accident history. A buyer may pay less for the repaired car.
Why it matters
A completed repair does not always settle a separate claim about market value.
What to check on your policy
Ask whether the claim is allowed, what evidence is required, which deadline applies, and whether an appraisal is needed.
Related car insurance terms
Put the terms into context
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