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Detailed Answer

When your vehicle sustains damage in a collision caused by another driver, its market value can drop even after repairs. This loss in resale value is called “diminished value.” Under New Mexico law, you can demand this amount from the at-fault driver’s insurer as part of your property damage claim.

Understanding Diminished Value

• Inherent diminished value: The natural loss in market value because the vehicle has an accident history.
• Repair-related diminished value: Value lost due to substandard repairs or aftermarket parts.

Legal Basis in New Mexico

New Mexico does not have a specific statute titled “diminished value,” but insurers must follow fair claim practices under:

• NMSA 1978, § 59A-16-20 (Unfair Trade Practices Act)
• NMAC 13.11.2.16 (Unfair Claims Settlement Practices)

Step-by-Step Process

1. Confirm liability: Verify another driver’s fault and obtain a police report.
2. Obtain a professional appraisal: Hire a qualified appraiser experienced in diminished value assessments.
3. Gather documentation: Collect repair invoices, parts receipts, appraisal report, photos of damage, and comparable market listings.
4. Draft a demand letter: Address the at-fault driver’s insurer, reference your claim number, attach the appraisal, and state the amount sought.
5. Submit the claim: Send the demand via certified mail with return receipt; keep copies of all documents and mail records.
6. Follow up: If you don’t receive an acknowledgment within 15 business days or a substantive response within 45 days, remind the insurer of its obligations under NMAC 13.11.2.16.
7. Explore next steps: If the insurer denies or underpays, you may file a complaint with the New Mexico Office of Superintendent of Insurance (OSI) or seek advice from an attorney.

Helpful Hints

• Document every step: maintain a detailed timeline of communications and dates.
• Use certified mail or a courier that provides proof of delivery.
• Compare similar vehicles (make, model, year, mileage) to support your market-value analysis.
• Review your own collision policy: some policies cover diminished value minus your deductible.
• Watch the deadline: New Mexico’s four-year statute of limitations for property damage claims (NMSA 1978, § 37-1-8).

Disclaimer: This article is for educational purposes only and does not constitute legal advice. Consult a qualified attorney for advice regarding your specific situation.