Adjusters Denying Diminished Value on Subsequent Accidents

Debunking the Flawed Denial of Diminished Value Claims Based on Prior Accidents

In recent times, a concerning trend has emerged in the insurance industry, whereby insurance adjusters are wrongfully denying diminished value claims based on the existence of prior accidents. This practice is flawed and misleading, as it fails to consider the impact of subsequent accidents with higher severity on a vehicle’s diminished value. In this article, we will explore why denying diminished value claims solely based on prior accidents is incorrect, and how subsequent accidents can actually increase the diminished value of a vehicle.

Understanding Diminished Value:

Diminished value refers to the loss of market value that a vehicle incurs following an accident, even after it has been fully repaired. Essentially, it reflects the perception that a repaired vehicle is worth less than an identical vehicle with no accident history. Diminished value claims are aimed at compensating vehicle owners for this loss.

Flawed Denial Based on Prior Accidents:

Insurance adjusters who deny diminished value claims based solely on the existence of prior accidents are overlooking the critical concept of severity. They assume that a prior accident automatically diminishes the value of a vehicle to its fullest extent. However, this assumption ignores the possibility of subsequent accidents with higher severity causing even greater diminution in value.

The Impact of Subsequent Accidents:

It is important to recognize that subsequent accidents, especially those of higher severity, can significantly impact a vehicle’s market value. When a vehicle is involved in a subsequent accident, potential buyers become increasingly wary, perceiving the vehicle as having a more extensive accident history. Consequently, this heightened perception of risk leads to a further reduction in the vehicle’s market value.

The Role of Severity in Diminished Value:

The severity of an accident plays a crucial role in determining diminished value. A minor fender bender may have a relatively low impact on a vehicle’s value, while a severe accident involving significant structural damage or the deployment of airbags can cause a substantial decrease in market worth.

When a subsequent accident occurs with higher severity than a prior accident, it can compound the diminished value. The reasoning behind this is simple: a more severe accident implies greater repairs and potential hidden damage. As a result, the perception of risk associated with the vehicle increases, further reducing its market value.

The Need for Fair Evaluation:

Insurance adjusters have a responsibility to conduct fair evaluations of diminished value claims. Instead of automatically denying claims based on prior accidents, they should consider the impact of subsequent accidents and the severity of each incident. Each accident should be evaluated independently to determine the cumulative diminished value caused by all accidents.


The recent trend of insurance adjusters denying diminished value claims solely because of prior accidents is flawed and misleading. It fails to acknowledge that subsequent accidents, particularly those with higher severity, can compound the diminished value of a vehicle. Fair evaluation of diminished value claims requires a comprehensive assessment that considers the cumulative impact of all accidents. By recognizing the importance of severity and conducting thorough evaluations, insurance companies can ensure fair compensation for vehicle owners and uphold their commitment to customer satisfaction.


Permanent link to this article: