• What is diminished value?

When you get into a car accident, California law will state that your car insurance must cover the damages of your vehicle if you meet the required conditions and have the right coverage. So, after your car has been fixed, perhaps you will decide to put your car up for sale or trade it in. One problem that you will face, though, is that when you put your once repaired vehicle up for sale, it will not sale for the value that it should.

This is not because of the regular depreciation. Let’s say that you’ve checked Kelley’s Blue Book and according to it and other calculations for the actual value of your car, it should sell for around ten thousand dollars. But you find that no one wants to take it for more than seven thousand. Why is that?

It’s because, when you repair your car, the value of it goes down because it is not so much in its original condition. The value drops even more when the car in question has been repaired with aftermarket parts.

• Can I make a claim for that?

According to California auto insurance law, no, you can’t. Thirty six states, in fact, have put language in their car insurance policies under the exclusions so that diminished value payments do not have to be made. According to a spokesman for State Farm, the value of a vehicle does not really decrease if the repairs are done by a mechanic with enough skill to return the car to its previous condition.

It remains to be seen whether diminished value exclusion language will be passed in every state, and whether or not the next step will be to file claims complaining about the person who apparently did not repair the vehicle as well.