Diminished Value Claim In Louisiana

A diminished value claim is a request for compensation for the difference between a car’s value before and after an accident. This can apply to cars, trucks, and motorcycles. 

Types of Louisiana Diminished Value Claims

There are two types of diminished value claims to consider after a vehicle has been repaired, Inherent Diminished Value and Repair Related Diminished Value. Inherent diminished value, also known as psychological diminished value, is the loss of value associated with the fact that the car has been damaged in an accident. For example, even if a car has been perfectly repaired, if a buyer has to choose between the repaired car and another identical car that has not been involved in an accident, the buyer will choose the one that was not in an accident. If he had to choose the repaired vehicle over the other car, he would require a discount. Repair related diminished value, is the diminished value associated with a car that was successfully repaired but is not perfectly repaired. With both inherent diminished value and repair related diminished value, the car is worth less after the accident than immediately before the accident.

Understanding Diminished Value

When a car has been in a major accident, its resale value typically drops compared to its pre-accident worth, even if repairs are of the highest quality. Buyers are often hesitant to pay the same price for a previously damaged vehicle.

Diminished value refers to the difference between a car’s market value before the accident and its worth after repairs. However, not all repaired vehicles experience diminished value—some older cars may even gain value if new parts replace worn-out ones.

Will Insurance Cover Diminished Value?

Whether an insurance company covers diminished value depends on several factors, including who was at fault and state-specific regulations. Since insurance policies vary by state, coverage eligibility is influenced by local laws and court decisions.

Louisiana Diminished Value Car Accident Property Damage Claim

When you are free of fault, what law do you use to encourage the other at-fault driver’s insurance company to pay your diminished value claim?

LA R.S. 9:2800.17. Liability for the diminution in the value of a damaged vehicle

Whenever a motor vehicle is damaged through the negligence of a third-party without being destroyed, and if the owner can prove by a preponderance of the evidence that, if the vehicle were repaired to its pre-loss condition, its fair market value would be less than its value before it was damaged, the owner of the damaged vehicle shall be entitled to recover as additional damages an amount equal to the diminution in the value of the vehicle. Notwithstanding, the total damages recovered by the owner shall not exceed the fair market value of the vehicle before when it was damaged, and the amount paid for the diminution of value shall be considered in determining whether a vehicle is a total loss under R.S. 32:702.