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How To Make A Diminished Value Claim

The point of car insurance is to make you whole again after an accident.

But no matter how expertly repaired, a car with an accident history will likely be worth less than one without -- even if the car looks as good as new and runs better than it ever has.

A car that has never been in a crash may be worth $15,000 at resale but thousands less if it has been in an accident and repaired. There's a way to make up the difference: a diminished value claim.

Diminished value insurance claims allow car owners to recover the difference between a car's pre-accident value and its value after repairs.

Don't expect the insurance company to help.

Some car owners file on their own, but others hire a private company to document the lower value. If the insurance company resists, owners may have to take them to court.

"It's definitely a challenge," says Shane Fisher, an attorney in Winter Park, Fla. "You have to put up a fight."

Before and after

If the accident was your fault, don't expect to be able to claim diminished value against your own policy. Few states -- and few insurance contracts -- allow it.

But if someone hits your car, nearly every state allows diminished value claims from an at-fault party's insurance company. Even if the person who hit you is uninsured, about half of the states allow diminished-value collection on your own uninsured motorist property damage coverage. (See " Why you don't have enough uninsured motorist coverage.")

Even so, "just because state law allows a diminished value claim doesn't mean insurers are required to pay it," says CarInsurance.com consumer analyst Penny Gusner. "Don't expect the process to be easy."

For a successful claim, you'll need an appraisal of the car's value both before the accident and after the repairs have been done.

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