What is a 'diminished value' claim?

• A. A claim for compensation for loss of use of the vehicle
• B. A claim for the repair costs following an accident
• C. A claim for the loss of value to a vehicle after repairs have been made
• D. A claim for punitive damages resulting from fraud

Answer: (C)

A 'diminished value' claim refers to the loss of value that a vehicle incurs after it has been involved in an accident and subsequently repaired. Even if a car is restored to its pre-accident condition in terms of functionality and appearance, its market value may decrease due to its history of damage. Potential buyers often perceive a damaged vehicle as less desirable, which is why it may sell for a lower price compared to a similar vehicle with no accident history.

This type of claim seeks compensation specifically for that loss in market value, which can be a significant financial concern for vehicle owners. It emphasizes the idea that, although the vehicle has been repaired, the stigma associated with its past damage can have a lasting impact on its resale value.