Inherent Diminished Value (also known as Diminution in Value) is the loss of value that occurs after a vehicle has been in an accident and is due to a consumer’s unwillingness to pay as much for the vehicle as they would an identical vehicle which has no damage history. Think of it this way: Given the choice between purchasing two vehicles that are identical except one of the vehicles had suffered significant damage in an accident the year before, which vehicle would you prefer? Most people would expect a discount to purchase the car that had been in an accident before.
There are two primary types of diminished value in Arizona:
- Inherent Diminished Value-assuming optimal repair, the inherent loss of value associated with the stigma of a prior accident.
- Repair Related Diminished Value-assuming sub-optimal repair, the loss of value associated with a poor repair.
The Good News: Diminished Value is a compensable claim in the state of Arizona.
The Bad News: Called by some to be the “best kept secret” in the insurance industry, many insurance companies simply refuse to pay or offer a very low settlement amount for diminution in value claims.
Consumers basically have three options: