# What is diminished value?

> Diminished value is a claimed reduction in a vehicle's market value after it has been damaged and repaired.

Glossary date: May 11, 2026.

## How it works

Availability depends on state law, fault, policy language, vehicle facts, and proof. First-party and third-party claims can follow different rules.

## Example

Two similar cars are offered for sale, but one has a major accident history. A buyer may pay less for the repaired car.

## Why it matters

A completed repair does not always settle a separate claim about market value.

## What to check on your policy

Ask whether the claim is allowed, what evidence is required, which deadline applies, and whether an appraisal is needed.

Coverage, definitions, limits, and legal requirements vary by policy and state. Your declarations page and policy forms control your coverage.

## Related terms

- [Actual cash value](https://locations.goautoinsurance.com/car-insurance-glossary/actual-cash-value.md)
- [Car insurance claim](https://locations.goautoinsurance.com/car-insurance-glossary/car-insurance-claim.md)
- [Fault determination](https://locations.goautoinsurance.com/car-insurance-glossary/fault-determination.md)

- [Car insurance guide](https://locations.goautoinsurance.com/car-insurance-guide.md)
- [Complete glossary](https://locations.goautoinsurance.com/car-insurance-glossary.md)