Detailed Answer

What diminished value means
After a crash, even when a vehicle is fully repaired, the car usually loses market value because it has an accident history. That loss in market value is called “diminished value.” Diminished value is separate from repair costs and can be claimed from the at-fault driver’s liability insurer.

Who can make a diminished value claim in South Dakota?
Generally, the vehicle owner (or a lienholder with a valid interest) can pursue diminished value from the at-fault driver’s liability insurer. If you use your own collision coverage to get repairs, you may also have a subrogation claim where your insurer pursues the at-fault insurer for repair costs and any deductible, and your insurer may or may not pursue diminished value on your behalf — you should ask your insurer how they handle subrogation and diminished value.

Types of diminished value
– Inherent diminished value: the typical loss in resale value because the vehicle has an accident history even after perfect repairs. This is the most commonly claimed form.
– Repair-related diminished value: loss from poor or incomplete repairs (visible defects, non-OEM parts).
– Immediate diminished value: the difference in market value immediately after the crash (before repairs) compared with before the crash. Most claims focus on inherent diminished value after repairs.

How to document and establish diminished value
1. Preserve all crash documentation: police report, photos of damage, photos of the vehicle before and after repairs, repair invoices, parts invoices, and any communications with insurers.
2. Get a detailed repair estimate and final invoice showing all repair work and parts used.
3. Obtain an independent diminished value appraisal or market analysis from a reputable appraiser who documents comparable sales, the car’s condition, mileage, trim/options, pre-accident value, and the calculated diminution. Appraisers use different methods (comparable sales, cost-to-cure adjustments, and formulas); a clear, marketplace-based appraisal carries more weight than a formula-only worksheet.
4. Collect evidence of the vehicle’s pre-accident market value (comparable listings, valuation guides, dealership quotes) to support the appraiser’s conclusions.

Making the claim: step-by-step
1. Identify the at-fault driver and their insurer from the police report or other sources.
2. Send a written demand to the at-fault driver’s insurer that includes: a cover letter, the diminished value appraisal, repair invoices/photos, proof of ownership, and a clear dollar demand. Keep a copy and proof of delivery.
3. Allow the insurer a reasonable time to investigate and respond. Insurers typically request additional documentation or may send their own appraiser. Keep records of all communications.
4. If the insurer offers less than your demand, consider negotiation, a neutral appraisal, mediation, or a lawsuit. Small-claims court or civil court are options for unresolved disputes; check local rules and dollar limits for small claims in South Dakota.

Timelines and statute of limitations
South Dakota has time limits for bringing lawsuits that apply to property-damage claims. Because rules and deadlines can vary depending on the facts (owner vs. lienholder, contract vs. tort), check the South Dakota statutes or ask a lawyer quickly after the crash so you do not lose the right to sue. For general consumer and insurance questions, the South Dakota Division of Insurance is the regulator to contact: https://dlr.sd.gov/insurance/. For the text of South Dakota law, see the South Dakota Codified Laws: https://sdlegislature.gov/Statutes/.

Practical points about dealing with insurers in South Dakota
– You can usually pursue diminished value from the at-fault insurer rather than your own insurer. If you file a diminished value claim with your insurer it could affect your deductible and rates depending on your policy.
– Keep communications with insurers in writing when possible. If you speak by phone, follow up in writing summarizing the call.
– If you suspect an insurer is handling your claim unfairly, you can contact the South Dakota Division of Insurance for consumer help and to learn whether a complaint or regulatory action is appropriate: https://dlr.sd.gov/insurance/consumer.aspx.

When to consult an attorney
If the insurer denies you outright, makes an unreasonably low offer, or if the diminished value amount is large relative to your repairs and vehicle value, speaking with an attorney experienced in South Dakota vehicle damage and insurance claims can help. An attorney can advise about negotiation strategy, appraisal clauses, settlement releases, and whether litigation is worth pursuing in your situation.

Disclaimer: I am not a lawyer and this is not legal advice. This article explains general information about diminished value claims under South Dakota practice. For advice about your specific situation, contact a licensed attorney or the South Dakota Division of Insurance.

Helpful Hints

• Take plenty of clear photos of vehicle damage from multiple angles before repairs begin.
• Keep all repair invoices and parts receipts; note whether OEM parts were used.
• Obtain an independent diminished value appraisal from a credentialed appraiser familiar with South Dakota and regional market values.
• Send your demand package to the at-fault insurer by certified mail or another traceable method; keep copies.
• Check whether your policy or the at-fault policy has an appraisal or appraisal-arbitration clause that affects disputes.
• If you use an attorney, ask how fees and costs will be handled (contingency fee, hourly, or other arrangements).
• Contact the South Dakota Division of Insurance for consumer resources or to file a complaint: https://dlr.sd.gov/insurance/.
• Act promptly — preserve evidence and seek an appraisal sooner rather than later to strengthen your position.