When you have a car accident, even when it is professionally repaired, it is usually not worth as much as it was before the crash. This market value loss is referred to as diminished value, and you might be compensated for this loss if another party caused the accident. Unfortunately, many drivers do not know about such a claim, and insurance companies do not often offer to pay it.

Learning about diminished value claims can profoundly impact the money you collect following a crash. According to Nevada law, not-at-fault drivers can claim compensation for the hidden losses of the resale value of a damaged car. However, you must learn the necessary rules, deadlines, and evidence to succeed in these claims.

The following are five quick facts about diminished value claims in Nevada that you can use to defend your rights and get the full value of your car after an accident.

  1. Diminished Value Is a Type of Compensatory Damages

After a car accident, you are entitled to compensation for medical bills, loss of wages, and the hidden loss of value. Under Nevada’s personal injury law, compensatory damages aim to restore you to the financial position you were in before being harmed by another person’s negligence. 

The damages are of two broad categories:

  1. Economic damages, such as repair bills and rental car expenses
  2. Non-economic damages, such as pain and suffering

However, they also include the property damage, namely, the reduced value of your car resulting from an accident. Before the crash, your once-new sedan was worth $40,000 on the open market. It has been reduced to a price of $30,000 after professional repair, just due to the collision history.

That $10,000 difference is not a cosmetic but a financial blow. That loss is recoverable and can be claimed against the at-fault driver's insurer. A dealer might only offer $30,000 because of the accident history, leaving you with a $10,000 loss.

  1. There Are Three Types of Diminished Value

In Nevada, diminished value can be classified into three categories, including the following:

  1. Inherent Diminished Value

When you hear the term inherent diminished value, think of it as the stigma your car has after an accident, no matter how perfect the repairs are. Inherent diminished value is the loss in the market value of your vehicle simply due to its accident history.

Even though a certified shop can fix your car to be as good as new, repair history will always be a scar on its record. Moreover, any intelligent buyer or dealer will always count that in the resale value.

Damage history will turn your car into a previously damaged car in the eyes of the market, and that is not a desirable label. It does not matter how well the frame was straightened or that OEM parts were utilized; perception determines the price.

For example, a luxury SUV worth $60,000 before the accident can lose $8,000 or more simply because the accident has become a part of its history, even though the repairs are as good as they were made in the factory.

Courts and insurers know this loss since the resale markets are punitive to any accident history. The most frequent grounds for such claims are inherent diminished value, since it represents an inevitable depreciation, even when no mechanical or cosmetic defects are present.

  1. Immediate Diminished Value

Immediate diminished value is the hypothetical decrease in the market value of your car at the moment when it is damaged and no repair tool has even touched it. Immediately after the crash, your vehicle, whether a humble sedan or a luxurious sports car, has decreased in value because it is wrecked, regardless of whether it is still drivable or how soon it will be repaired.

Imagine this: you had a car worth $35,000 yesterday before the accident, and you might only get $25,000 when you sell it in its damaged condition, even when it is only cosmetic damage. This value drops as buyers and dealers evaluate risk, uncertainty, and the price of reinstating it to pre-accident status. This kind of diminished value is what is captured by that immediate financial hit.

Not usually asserted, particularly in Nevada, immediate diminished value comes into play when a vehicle is sold or appraised before repair or when the owner does not repair it promptly. It may also manifest itself in legal proceedings where the parties argue about the compensation regarding the vehicle's condition immediately after the accident, not after it has been repaired.

It represents the market’s immediate reaction to damage, without accounting for any repairs or restorations. However, because most owners rush to make repairs, this type tends to be lost in the shadow of the more popular inherent diminished value.

  1. Repair-Related Diminished Value

Repair-related diminished value occurs when the quality of the repairs themselves pulls down the value of your car. Although the store may send your car back in showroom condition, hidden structural or cosmetic flaws may silently eat away at its resale value. This reduced value is not only because your car was damaged, but also because of how well or poorly it was reassembled.

These faults may not be immediately visible, but trained appraisers or dealers often detect them. The color of the new panel may not match the original color in daylight, or the body fit may be slightly off.

At times, non-OEM, cheaper parts are installed, or advanced technology, such as parking sensors or lane assist features, fails to recalibrate perfectly following the repair. These small details add up, making the car less attractive on the used car market.

For example, suppose your $40,000 SUV is repaired after a collision, but the repair is cosmetically sound and uses aftermarket parts rather than manufacturer-recommended parts. A dealer may value it at $35,000 rather than $37,000 because they know a buyer will be wary of non-OEM parts and the possibility of latent defects. That $2,000 deficit is repair-related diminished value, and it can haunt your wallet when you go to sell or trade in.

This form of claim in Nevada is necessary when you can demonstrate that the quality of repair did not bring the car back to its original state because of workmanship, parts, or unnoticed damage. Record all the details of your repair process, such as the parts that were used, the qualification of the shop, and the performance problems after the repair, and this will support your claim when you are trying to argue that you should be compensated on this basis.

More than one of these diminished value types applies in many instances. When you are involved in a collision, the stigma that comes with it is still there even after repair. Repair-related problems can also drag the value of your car further down if the body shop makes a mistake. Being aware of the differences will enable you to negotiate with adjusters confidently: you are not requesting a blanket payout; you are checking every box the Nevada law permits you to check.

  1. You May Not Recover if You Were at Fault

Many people assume that insurance covers all losses, but that is not always true in Nevada's fault-based system. Nevada has a fault-based insurance system, which implies that the insurance follows the person who caused the damage and not your insurance company.

If a different driver crashes into your car, you may file a diminished value claim against their insurer. But if you were the one who caused the accident, you are generally not covered under the property damage coverage of your insurance.

There are a few exceptional situations where you can recover even when you were at fault. Your policy may have an unusual diminished value endorsement, or your insurer may permit a claim under uninsured/underinsured motorist property damage. Still, these are the exception and not the rule. Most of the time, the drivers who cause the accident cannot sue their insurer based on diminished value. It is a detail you can forget until it costs you thousands.

An example is a person who parks and accidentally hits their garage. Sally scratches her door, has it painted over, and the new paint does not match perfectly. As a result, the vehicle’s market value declines. Since she caused the damage, Nevada law typically does not allow recovery for diminished value in such cases, leaving her responsible for the loss. This situation demonstrates the significance of fault in diminished value claims in Nevada's system.

  1. Insurers Use the 17C Formula to Calculate Diminished Value

While not mandated by Nevada law, insurance companies often rely on the 17C formula to estimate diminished value. Based on Georgia's case law of the early 2000s, this approach has insurers limit the diminished value to ten percent of the pre-accident market value of your vehicle. It then multiplies that figure by damage severity and mileage factors to arrive at a final payout figure.

First, suppose that your car was valued at $20,000 before the crash. The formula takes ten percent of that, or 2,000, as the basic loss of value. Then, it uses a damage multiplier, which is selected between zero (no structural damage) and one (extensive structural damage). As an illustration, if the crash caused moderate structural damage, the insurer would multiply that $2,000 by 0.5, which is $1,000.

Lastly, it uses a mileage multiplier, which is further adjusted depending on the number of miles on the odometer; a low-mileage vehicle increases the multiplier, while high mileage decreases it. For your vehicle with 30,000 miles, the multiplier might be approximately 0.8, in which case the ultimate award will be $800 ($1,000 x 0.8).

Suppose your SUV was valued at $25,000 before the crash, to make that example come alive. This is 10 percent, which is $2,500. The insurer classifies your damage as major and applies a 0.75 damage multiplier, which gives you $1,875. Then, based on your 50,000 miles, the insurer applies a 0.6 multiplier, which reduces the claim to $1,125. That last amount is usually a meager amount that falls in your claim review letter.

Critics correctly term the 17C formula as a simplistic point of departure. They argue that it systematically underreports real lost value by disregarding vehicle class, geographic market differences, and the stigma of accident history. In addition, using a mileage multiplier following the determination of market value based on mileage-based guides is tantamount to being punished twice due to wear and tear.

Insurers often give this estimate despite its shortcomings, hoping you will agree. When you dispute the amount and insist on a market-based appraisal with comparables or employ a certified appraiser compliant with the USPAP, they often raise the price instead of taking it to court. They could have started with $800, but it is more economical to settle when they see your dealer-comparable report that you have dropped $3,500.

  1. Proving Diminished Value Is Challenging

In Nevada, it is up to you to demonstrate the reduced value of your vehicle. Insurance companies are not obligated to work out this loss on your behalf and will not compensate you based on assumption or goodwill. 

You should have clear and believable evidence that your vehicle's market value has declined due to the accident, despite the repair. Courts will not hear vague allegations or your estimations; they want hard evidence depicting your financial loss. Otherwise, your assertion will be downplayed or rejected altogether.

Professional Appraisals

The gold standard of proving diminished value is a professional appraisal. By engaging the services of a USPAP-compliant appraiser, you will be getting a professionally trained appraiser to assess your car's pre-accident value against the post-repair value. This is not an approximate value; it is a report based on market values, repair history, and professional evaluation of the appraiser. 

Courts, including the Nevada Supreme Court in applicable cases, have accepted professional appraisals as valid evidence of diminished value. An assessment done by a professional may frequently turn the tables in your favor by giving a credible, impartial evaluation of your loss.

Dealer Trade-In Estimates Will Make Your Case Stronger

Another strategic action is visiting a dealership and having a trade-in estimate after repairs. When the dealer quotes you a price far below the normal value of your car, just because of its accident history, then that is practical evidence of diminished value.

Several trade-in offers will support your argument, particularly when various dealerships continue to underestimate the value of your car after repair. These written estimates are based on the actual market conduct and can be convincing in opposing the lowball settlement offer of an insurer.

Comparing Similar Vehicles to Prove Value Loss

The other effective way of proving diminished value is by comparing your vehicle to similar models available on the market. You will be interested in locating the listings of the cars of the same make, model, year, mileage, and condition, but without the accident history.

When similar cars sell at significantly higher prices than your car would sell at, then that difference is strong evidence of your loss. This market comparison provides a before-and-after picture that insurance adjusters and courts cannot easily ignore.

Support Documentation That May Tip the Balance

Putting together a full package of documents to complete your evidence is essential. Include repair invoices, before-and-after photos, detailed records of any aftermarket parts, and a formal appraisal report. Every document you have is a layer of your case, explaining the damage and the economic impact that ensued. The better you document, the more difficult it will be for an insurer to fight your claim.

The Reason Why Insurers Settle in the Presence of Good Evidence

When confronted with solid evidence, insurance companies are not enthusiastic about litigation. You will likely win your case by presenting a professional appraisal, dealer estimates, market comparisons, and solid documentation.

Insurance companies are aware of the cost and time it takes to defend a claim in court, and when your case is airtight, they will usually settle instead of risking a judgment against them. That is why the best thing you can do to get the compensation you deserve is to prepare a thorough, well-documented claim.

Find a Personal Injury Lawyer Near Me

The difference between accepting a fixed but depreciated vehicle and getting the full compensation you deserve may be understanding the concept of diminished value claims in Nevada. Insurance companies will not give you this information without demanding it; you may lose thousands of dollars unless you demand your rights. Educating yourself on the nature of diminished value, the shortcomings of the 17C formula, and the significance of concrete evidence will help you safeguard your financial well-being.

Nevertheless, it is not simple to file a diminished value claim. Insurers usually understate or deny losses; you can easily be shortchanged without a good lawyer. An experienced Nevada personal injury lawyer will be able to construct a convincing case, negotiate, and compensate you for the injuries and all the hidden losses, including diminished value.

If you have been in an accident and your car’s value has decreased, call Las Vegas Personal Injury Attorney Law Firm at 702-996-1224 and get a free consultation today. We’ll help you fight for the full value of your vehicle and protect your financial interests.