Detailed Answer
Short explanation: “Diminished value” is the reduction in a vehicle’s market value after it has been damaged and repaired. To prove diminished value in South Dakota you need a written, market‑based appraisal that documents the pre‑loss value, the repairs, and the appraiser’s method for calculating lost market value. That appraisal supports a claim to the at‑fault driver’s insurer (or your own insurer, if applicable).
What diminished value means and the types appraisers consider
- Inherent diminished value: The typical drop in market value after a vehicle has had damage and repairs, even when repairs are done well.
- Immediate diminished value: The difference between pre‑loss market value and the vehicle’s value right after the accident (before repairs).
- Repair‑related diminished value: If repairs are incomplete, poor, or use non‑OEM parts, this can reduce value further.
Step‑by‑step process to get a credible diminished value appraisal in South Dakota
- Document the incident immediately. Get and keep the police report, photos of damage, scene photos, witness contact info, and any rental receipts. Photos of the vehicle before the accident (if available) are especially helpful.
- Obtain written repair estimates and invoices. Ask the repair shop for a detailed, itemized estimate and then the final invoice showing parts and labor. Keep all receipts for related expenses.
- Gather pre‑loss value evidence. Pull sources that show what your vehicle was worth before the loss: NADA, Kelley Blue Book, local comparable listings, prior sale listings, and mileage records. These support the appraiser’s pre‑loss market value opinion.
- Order an independent diminished value appraisal. Hire an appraiser who regularly performs diminished value reports. Look for appraisers who provide:
- a written report with methodology,
- photos of the vehicle and damaged areas,
- market comparables, and
- a clear dollar opinion of loss in value.
Typical credentials include automotive appraisal organizations and relevant certifications (look for experience in post‑repair market comparisons). Expect the inspection to take 30–90 minutes and the written report in several days to two weeks, depending on complexity.
- Review the appraisal methodology. A strong appraisal explains how the appraiser determined pre‑loss value, how repairs affect value, and why the stated diminished value is reasonable. Market comparables (sales of similar vehicles) are the most persuasive support.
- Submit a demand to the at‑fault insurer. Send the appraisal, repair invoices, photos, and a short demand letter asking for the diminished value amount. Include your contact info and a deadline for response. Keep copies of all communications.
- If the insurer rejects or undervalues the claim, escalate. Options include negotiating, asking for an independent appraisal clause (if your policy or the at‑fault policy contains one), filing a complaint with the South Dakota Division of Insurance (see below), or filing a lawsuit. For smaller amounts, South Dakota magistrate (small claims) court may be appropriate; for larger claims, consult an attorney.
Procedural and timing notes under South Dakota law
Insurance companies licensed in South Dakota must follow state insurance laws and handling standards found in Title 58 of the South Dakota Codified Laws. For consumer assistance or to file a complaint about claim handling, contact the South Dakota Division of Insurance: https://dlr.sd.gov/insurance/ or the Division’s consumer pages.
If you need to sue over diminished value, civil actions for property damage in South Dakota are governed by the state civil code (Title 15). It is important to be aware of the applicable statute of limitations and filing rules in Title 15 and to confirm deadlines before taking action: https://sdlegislature.gov/Statutes/Title/15. For statutes related to insurance company duties and licensing, see Title 58: https://sdlegislature.gov/Statutes/Title/58.
Example (hypothetical facts to illustrate)
Jane Doe is driving a 2016 sedan worth $12,000 before a rear‑end collision. Repairs cost $3,200 and are completed with OEM parts. Jane obtains an independent diminished value appraisal that compares similar 2014–2018 sedans with no accident history and concludes a $2,200 loss in market value after repair. Jane submits the appraisal plus repair invoices to the at‑fault driver’s insurer and demands $2,200. If the insurer offers a lower settlement or denies responsibility, Jane may file a complaint with the Division of Insurance or consider small claims court or civil court depending on the amount.
What an appraiser’s report should include
- Contact information and qualifications of the appraiser.
- VIN, mileage, year, make, model, and trim of the vehicle.
- Photos of damage and repaired areas plus overall vehicle photos.
- Pre‑loss market value evidence and comparables.
- Repair estimate and final invoice review.
- Detailed explanation of the method and calculation used to reach diminished value.
- Clear dollar figure and date of valuation.
Costs and timing
Independent diminished value reports commonly cost from about $150 to several hundred dollars depending on complexity. Expect turnaround from a few days to two weeks. Faster service often costs more.
When to involve an attorney
- If the insurer denies liability for the accident but you have an appraisal showing diminished value.
- If the insurer’s low offer is far below credible appraisals and negotiations stall.
- If your diminished value claim is large or complicated (classic cars, salvage/title issues, multiple owners).
Helpful Hints
- Preserve all evidence: photos, police report, estimates, invoices, and rental receipts.
- Get at least one independent diminished value appraisal from someone who provides market comparables and a written methodology.
- Check vehicle history reports (Carfax, AutoCheck) to confirm whether prior accidents or titles affect value. Provide these to the appraiser.
- Do not sign away your right to pursue diminished value in exchange for a repair payment unless you understand the waiver language.
- Ask the appraiser to explain and document their comparable‑sales approach — market comparables are more persuasive than purely formulaic calculations.
- If the at‑fault insurer refuses to pay, consider a complaint to the South Dakota Division of Insurance: https://dlr.sd.gov/insurance/
- Before filing a lawsuit, confirm the applicable deadlines in South Dakota civil law (Title 15): https://sdlegislature.gov/Statutes/Title/15
- For small disputes, check the South Dakota Unified Judicial System for court and small claims guidance: https://ujs.sd.gov/
Disclaimer: This article explains general information about proving diminished vehicle value in South Dakota. It is not legal advice and does not create an attorney‑client relationship. For advice about your specific situation, contact a licensed South Dakota attorney.