Detailed Answer
After a collision, a vehicle’s market value often drops even when repairs restore its condition. Tennessee law recognizes “diminished value” as a property damage claim. While no single statute defines a diminished value formula, insurers must comply with the Unfair Claims Practices Act, Tenn. Code Ann. § 56-7-105, which prohibits undervaluing legitimate claims. You can calculate and document diminished market value by following these steps:
1. Determine Pre-Accident Value
Use reputable pricing guides such as Kelley Blue Book, NADA Guides or Edmunds. Record the retail value of your make, model, year, mileage and condition immediately before the accident. Print or save the report.
2. Obtain Post-Repair Value
After repairs, request a new valuation from the same guides. Select “excellent” or “like-new” condition only if your vehicle truly meets those criteria. Otherwise, use “very good” or “good” ratings that match actual wear and tear.
3. Calculate Diminished Value
Subtract the post-repair value from the pre-accident value:
Diminished Value = Pre-Accident Value – Post-Repair Value
For a rough independent estimate, use the Insurance Research Council’s 10-17-25 rule or online diminished value calculators. These methods apply multipliers based on damage severity and mileage.
4. Gather Supporting Documentation
- Photos of damage before and after repair
- Detailed repair invoices showing parts and labor costs
- Appraisal from an independent auto appraiser
- Comparable vehicle listings in your market
5. Submit Your Claim
Send a written demand for diminished value to the at-fault driver’s insurer. Attach all documentation. Cite Tenn. Code Ann. § 56-7-105 to remind the insurer of its duty to settle fairly.
6. Respect the Statute of Limitations
Under Tenn. Code Ann. § 28-3-105(3), you must file suit for property damage within three years of the accident. If you miss this deadline, you may lose your right to recover diminished value. (Tenn. Code Ann. § 28-3-105)
Helpful Hints
- Request an independent appraisal before final repairs.
- Keep a repair log with dates, invoices and communications.
- Compare similar vehicles in your county for market consistency.
- Ask your adjuster in writing if they include diminished value in settlement.
- If the insurer denies your demand, consider mediation or small-claims court.
Disclaimer: This article is for informational purposes only and does not constitute legal advice. For advice specific to your situation, consult a licensed attorney.