Detailed answer

What “diminished value” means

Diminished value is the reduction in a vehicle’s market value caused by an accident, even after repairs are completed. For a truck owner who suffers a covered loss, a diminished value claim seeks the difference between the truck’s market value immediately before the new accident and the truck’s market value after repairs.

Types of diminished value claims

• Inherent diminished value: market stigma after an accident (most common).
• Repair-related diminished value: repairs were incomplete or substandard, lowering value.
• Immediate loss (loss of use) and total loss scenarios (separate issues).

How prior accidents before you owned the truck affect a claim

Prior accidents that occurred before your ownership change the baseline against which diminished value is measured. Insurers and courts generally will not reimburse you for value losses that existed before your ownership or that were caused by earlier accidents. Instead, compensation normally relates only to the incremental loss caused by the recent accident.

Put simply:

• If the truck already had diminished value from earlier accidents, you cannot recover that pre-existing loss from the new at-fault party or their insurer.
• To recover diminished value for the new accident, you must show how much additional loss the new accident caused beyond the truck’s pre-accident condition (the condition just before the new crash).

Who pays and how claims are treated

There are two common claim pathways:

1. Third-party claim (against the at-fault driver): You can seek full compensation for all damages caused by that driver, but the measurable loss will be limited to the decrease in value caused by that driver’s accident, not pre-existing damage.
2. First-party claim (your own insurance): Your insurer will consider policy language, available coverage (e.g., collision or comprehensive), and may limit payment if pre-existing damage existed. Your insurer may reduce or deny diminished value if pre-existing damage was not disclosed or was material to the loss.

How insurers and appraisers handle prior damage

• Insurers will compare three values: vehicle value before any prior damage (rarely used), value immediately before the new crash (typical baseline), and value after repairs following the new crash.
• Appraisers use file histories (vehicle history reports), photos, prior repair invoices, and pre-purchase inspection reports to identify pre-existing damage and assign that portion of the loss to prior events.
• When prior damage exists, the diminished value award is the difference between market value immediately prior to the new crash and market value after repair — effectively excluding the earlier loss.

Evidence you need to document prior condition and prove additional loss

To make a stronger diminished value claim despite prior accidents, gather:

• Vehicle history reports (e.g., Carfax, AutoCheck) showing dates and descriptions of prior accidents.
• Pre-purchase inspection reports and photos you received before buying the truck.
• All repair invoices and parts receipts from prior owners and from the recent repair.
• Current market data: comparable sales of similar trucks with and without accident history.
• An independent diminished value appraisal from a qualified auto appraiser who will explain how much value was lost from the new accident only.

Practical example (hypothetical)

Imagine you bought a truck that had a prior, minor accident while the previous owner had it. The truck’s market value the day you bought it was $30,000 (reflecting whatever effect the prior accident had at that time). A new at-fault collision while you own it reduces the truck’s market value to $26,500 after repairs. The diminished value claim relates to the difference between the vehicle’s market value immediately before this new accident and after repairs — not to the value change caused by the prior owner’s crash. If the truck’s value immediately before the new crash was $29,000 (because you upgraded or had it repaired), your recoverable diminished value would be $2,500, not the total drop from $30,000 to $26,500.

Common insurer defenses and how to respond

• Defense: pre-existing damage caused the loss. Response: produce pre-accident photos, inspection reports, and history reports showing condition just before the crash.
• Defense: diminished value is speculative. Response: hire a credentialed appraiser and provide comparable sales data.
• Defense: you didn’t disclose prior damage. Response: show that you disclosed what you knew and provide any documentation available at purchase.

North Dakota resources

If you have questions about insurer practices or need to lodge a complaint, contact the North Dakota Insurance Department for consumer resources and complaint guidance: https://www.nd.gov/ndins/consumer

For the North Dakota Century Code and to review statutes on insurance and civil claims, see the North Dakota Legislative Branch site: https://www.legis.nd.gov/

When to consult an attorney

Talk with a North Dakota attorney if:

• Your insurer denies diminished value or reduces it because of alleged prior damage and you disagree.
• The at-fault party’s insurer refuses to pay fair compensation for the incremental loss caused by the new accident.
• Your potential recovery is large and warrants professional negotiation or litigation.

An attorney can evaluate whether the pre-existing damage attribution is reasonable, help interpret applicable North Dakota law, and estimate likely recovery after proper proof.

Helpful hints

• Collect evidence right away: take clear photos of the vehicle from all angles before repairs begin.
• Obtain a vehicle history report and preserve any pre-purchase inspection records you received when you bought the truck.
• Get an independent diminished value appraisal early, before settling with any insurer.
• Ask the at-fault insurer whether they accept diminished value claims and whether they require an appraisal or allow an independent appraiser.
• Keep all repair invoices and communications with insurers in writing (email recommended).
• If the dispute is small, consider arbitration or small claims court; for larger disputes, consult a lawyer to evaluate litigation options.
• If you believe an insurer acted unfairly, contact the North Dakota Insurance Department: https://www.nd.gov/ndins/consumer
• Check the North Dakota statutes and local rules about time limits for property damage claims on the legislature site before your claim becomes time-barred: https://www.legis.nd.gov/