Rosenbaum Personal Injury Lawyers | August 1, 2025 | Personal Injury
If you’re involved in a car accident, your first priority is usually repairing the vehicle and ensuring everyone’s safety. However, even after your car is repaired, its market value likely won’t be the same. This reduction in value, known as diminished value, can have a major financial impact—especially if you plan to sell or trade in your car in the future.
Many drivers in New York are unaware that they may be entitled to compensation for this loss.
Understanding how diminished value claims work under New York law can help you protect your financial interests after a crash.
What Is Diminished Value?
Diminished value refers to the loss in your vehicle’s resale or trade-in value after an accident, even if repairs revitalized your vehicle. Prospective buyers and dealerships often avoid paying full market value for a vehicle with an accident history, and this stigma can affect the value of your car.
There are three main categories of diminished value:
- Immediate Diminished Value: the difference between your vehicle’s pre-accident value and its value immediately after the accident, before repairs
- Repair-Related Diminished Value: loss of value due to poor repairs, visible defects, or use of non-original parts
- Inherent Diminished Value: the most common type, representing the loss in value simply because the car now has an accident history, even if fully repaired
In most claims, inherent diminished value is the primary focus.
Are Diminished Value Claims Allowed in New York?
Yes, in many cases. While diminished value is not specifically outlined in insurance statutes, New York law allows recovery for all property damage caused by someone else’s negligence.
Under New York Insurance Law § 2601, insurance carriers are prohibited from engaging in unfair settlement practices. If another driver is at fault, their insurer must pay for damages, which can include diminished value, because it is part of your overall property losses.
Additionally, New York Vehicle and Traffic Law requires every driver to carry liability coverage for property damage they cause. Courts have interpreted “property damage” broadly, which can include the loss in value of a repaired vehicle.
How to Calculate Diminished Value in New York
Calculating diminished value is not as straightforward as calculating repair costs. Insurance companies often use formulas that factor in the car’s pre-accident value, mileage, and the severity of the damage.
However, these formulas often favor insurers and may significantly undervalue your claim. Many drivers hire independent appraisers to conduct a market-based analysis and provide an accurate diminished value report. This can be critical in negotiating a fair settlement.
How to File a Diminished Value Claim in New York
Filing a diminished value claim requires organization and persistence. Here are the essential steps:
Document Everything
Take photos of the accident scene, your damaged vehicle, and all completed repairs. Keep detailed invoices and receipts from the repair shop.
Obtain an Independent Appraisal
An expert appraisal can help establish the true diminished value of your car, giving you leverage when negotiating with the insurance company.
Submit the Claim to the At-Fault Driver’s Insurance
Include the appraisal report, repair invoices, and evidence of the vehicle’s pre-accident condition. Make your claim in writing and keep copies for your records.
Take Legal Action
If the insurance company denies or underpays your claim, you may need to work with a New York personal injury attorney to file a lawsuit and pursue full compensation.
It is best to consult with an experienced legal professional to discuss whether there may be other factors to consider when filing your claim.
What if You Were Partially at Fault?
New York follows a pure comparative negligence rule, meaning you can still recover compensation for diminished value even if you were partly at fault—your payout will simply be reduced by your percentage of fault.
For example, if your diminished value claim is $5,000 and you were found 20% at fault for the crash, you could still recover $4,000. This rule provides important protection for New York drivers in accidents where multiple parties are at fault.
How Long Do You Have to File a Claim?
Under New York Civil Practice Law & Rules § 214, you typically have three years from the date of the accident to file a property damage claim, which includes diminished value. If you miss this deadline, you may lose your right to recover compensation permanently.
Common Challenges in Diminished Value Claims
Insurance companies often push back against diminished value claims for several reasons:
- They may argue that repairs restore the car’s value.
- They may use low-value formulas to minimize payouts.
- They often delay or deny claims, hoping claimants will give up.
This is why having legal representation can make a significant difference in your outcome. A lawyer can gather evidence, negotiate on your behalf, and ensure the insurer complies with New York law.
Why Hiring a Lawyer Matters
Diminished value claims can be complex and highly contested. A Bronx personal injury lawyer can help by:
- Coordinating professional appraisals
- Building a strong case based on market data
- Challenging lowball offers and unfair insurer practices
- Filing a lawsuit when negotiations fail
An experienced attorney ensures that you recover the full compensation you deserve—not just for visible repairs but for the hidden financial loss that comes with an accident history.
Contact a Bronx Personal Injury Lawyer at Rosenbaum Personal Injury Lawyers for a Free Consultation
Car accidents can cost more than repair bills. The impact on your vehicle’s resale value can follow you for years. Fortunately, New York law allows drivers to seek compensation for diminished value as part of their property damage claim.
If you’ve been injured in an accident in Manhattan, NY, and believe your car’s value has dropped, don’t settle for less than you deserve. Contact our Bronx personal injury lawyers at Rosenbaum Personal Injury Lawyers to schedule a free consultation. We also serve in Brooklyn and the Bronx.
Rosenbaum Personal Injury Lawyers – New York City Office
100 Wall St 24th Floor
New York, NY 10005
(212) 514-5007
Rosenbaum Personal Injury Lawyers – Bronx Office
1578 Williamsbridge Rd suite 3b
Bronx, NY 10461
(212) 514-5007
(917) 905-2339
Rosenbaum Personal Injury Lawyers – Brooklyn Office
32 Court St #704
Brooklyn, NY 11201
(212) 514-5007
(917) 920-7332
