How much is that wrecked car worth?

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3 min read

Once your vehicle has been in an accident, its value takes a hit.

According to a 2009 survey by, a wreck in the past could drop a vehicle’s resale value between 10 percent and 30 percent, with frame damage being a total deal-breaker for most respondents.

Unfortunately, auto insurance companies typically are only contractually obligated to make repairs and restore your ride to its pre-accident condition. That can leave you stuck with several thousand dollars in diminished value, or DV, the industry term for the difference between what your car was worth before and after the accident.

What can you do?

Although the odds are stacked against you if you caused the accident, many drivers succeed in recovering diminished value as a third-party claim when the other guy is at fault. But the onus will be on you to put a dollar amount on your DV and then convince the insurance company that it’s the company’s problem, not yours.

“The typical response when people ask their carrier about diminished value is, ‘What’s that? We don’t pay that in this state,'” says attorney David Neiser of Neiser & Neiser Law Group in St. Petersburg, Fla.

Neiser says auto insurers have traditionally taken an ostrich stance toward DV. “My experience is that they don’t want to recognize it and they don’t want to pay out the money if they don’t have to,” he says. “Some will say they only pay when you sell your car, but when you do sell, they’ll say, ‘Where is your expert?’ Of course, by then you don’t have the car anymore.”

Insurers on the hush-hush

Then along came, which enables the average car buyer to easily research a car’s history online. Suddenly more consumers became aware of diminished value and wondered why their auto insurance doesn’t cover it. Although a few states, including Georgia and Kansas, believe they should, most case law has let insurers off the hook so far.

To meet the growing demand for DV estimates, Viraf Baliwalla recently launched, a companion site to his site, which charges $39 for a diminished value report.

“When we started digging around about this with brokers and companies themselves, it was like, ‘Shush — we’re not allowed to say anything!’ They really don’t want people to know about it because the more people are aware of it, the more claims they’re going to get,” he says.

Aston Martin worth $39,000?

Although the typical DV figure usually falls in the small claims range of $5,000 or less, it’s the exotic cars that send owners, and increasingly insurers, to the site, whether to defend a claim or challenge one.

“We had a brand-new Lamborghini that had a diminished value of $25,000,” recalls Baliwalla. “Here’s a search for a 2009 Aston Martin run by an insurance company, 185 miles on it, cost $211,000, had $91,000 in structural damage and it had a DV of $38,955.”

The larger the DV, the more likely the pushback from an insurer, says Baliwalla.

“Imagine if you had to spend an extra $1,000 on every claim that went out. Now your premiums are going to be depleted very quickly and you’re going to have to raise your premiums for everyone who didn’t have a claim,” he says. “It’s a very fine line that insurance companies have to tread.”

Neiser picks up plenty of clients who have already had doors slammed in their faces. He says the economic reality of fighting for diminished value is one reason that insurers can hide their heads in the sand.

“If you’re talking about a claim that is only worth a limited amount of money, my perception is that it’s probably going to be difficult to get an attorney to take that case and the insurance companies probably know that. Therefore, the insurance companies can hold the values down,” he says. “If you don’t have an attorney willing to take the case, you’re pretty much at the mercy of whatever they’re willing to offer.”

Including nothing.

If you choose to pursue a legal remedy, factor in your costs first. Neiser’s firm takes roughly one-third of any settlement — but only if it wins. You’ll also be tapped for the costs to file the lawsuit and the services of an auto appraisal expert. And don’t wait too long; there may be a time limitation to file a DV claim. Check with your insurer and department of insurance for the restrictions in your state.