Can I sue an insurance company for the diminished value of my car after accident that was not my fault?

Insurance company insists on making over $10,000 of repairs to a car that is worth $14,000. Repairs include unibody damage. Am I enttitled to a diminished value claim?

Asked on August 23, 2011 Arizona


SJZ, Member, New York Bar / FreeAdvice Contributing Attorney

Answered 9 years ago | Contributor

Unfortunately, you almost certainly cannot sue on this basis. An insurer's obligation is NOT to make sure you suffer no lose of value. It is rather to do the less expensive of: 1) repair; or 2) total the car and pay it's then value. If the repair costs $10k, but totalling the car would cost them $14k, they may opt to repair instead. This will almost certainly reduce the value of your vehicle, since a repaired car is not worth as much as one that had never been in an accident; on the other hand, this a feature of every accident repair, whether it costs $10,000 or only $1,000. In no cases does the insurer have to compensate the insured for the dimunition of value occasioned by the repair. So unfortunately, you woudl have no recourse in this situation.

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