FAQ: Diminished Value Claims When You Don’t Own the Car (Utah)

Disclaimer: This article explains general legal concepts under Utah law and is for educational purposes only. This is not legal advice. Consult a licensed Utah attorney about your specific situation.

Quick answer

Diminished value is the loss in a vehicle’s market value after it’s been damaged and repaired. In Utah, the right to a diminished value recovery usually belongs to whoever has a property interest in the vehicle (most commonly the titled owner or a secured lender). If you do not own the car, you cannot automatically collect diminished value unless the owner assigns that right to you, the lease/loan contract reserves rights to the lessor/lienholder, or you have express written authorization. You can still help pursue a claim on the owner’s behalf, but you will generally need the owner’s cooperation or an assignment to be paid.

How diminished value works under common Utah situations

1. You are a lessee (leased car)

If the vehicle is leased, the lease usually makes the lessor (the finance company) the owner. Many lease contracts require you to maintain insurance and to report damage. Diminished value technically belongs to the titled owner (the lessor). The lease or the lessor may have the right to recover diminished value from a third party. If you want diminished value paid to you (for example, to make you whole under lease-end charges), the lessor must assign the claim or otherwise agree in writing to let you pursue and be paid.

2. You are a driver but not the owner

If you were driving someone else’s car when another driver caused the damage, the vehicle owner is the proper party to demand diminished value from the at-fault driver’s insurer. You can collect evidence, help with the claim, and even pursue the claim with the owner’s signed authorization or assignment—but insurers will usually only pay the party who holds the property interest unless the owner assigns the right to you in writing.

3. The vehicle is financed (there is a lienholder)

When a lender holds a security interest, the lender’s interest appears on the title. A lienholder typically gets paid out of an insurance settlement up to the payoff amount if the vehicle is a total loss. For diminished value (which is different from a total-loss settlement), the legal right to recover usually stays with the titled owner unless the lender is named as an additional insured or loss payee or the owner assigns the claim. Lenders rarely pursue diminished value unless the diminished value reduces the market value and affects payoff or the lender has contract terms allowing recovery.

Types of diminished value claims and who may pursue them

• First-party claim: You claim diminished value from your own insurer. Most policies and insurers focus on repair costs; some policies and jurisdictions limit or deny first-party diminished value recoveries. Check your policy language and Utah insurance rules. See Utah Insurance Code, Title 31A for state insurance regulation: Utah Code Title 31A (Insurance).
• Third-party claim: The vehicle owner pursues diminished value from the at-fault driver’s insurer. This is the usual path for non-owner drivers—only the owner (or an assigned party) can demand payment for the owner’s loss.
• Assignment or subrogation: The owner can assign the diminished value claim to you in writing, or an insurer that paid the owner may assert subrogation rights against the at-fault party and recover diminished value for the insured’s loss.

Practical steps if you don’t own the car but want to pursue diminished value (Utah)

1. Get written permission or an assignment from the titled owner. An insurer will almost always ask for proof that the claimant has the right to recover diminished value.
2. Gather evidence: high-quality photos (pre- and post-repair if available), repair invoices, receipts, a vehicle history report (e.g., Carfax), comparable sales/listings, and any pre-accident valuation data.
3. Obtain a professional diminished value appraisal if the insurer disputes the amount. Professionals document market loss and can give an expert report.
4. Notify the at-fault driver’s insurer (or your insurer if handling a first-party claim) and present the owner’s assignment or authorization and the valuation evidence.
5. If the insurer denies or undervalues the claim, consider demand letters, mediation, filing a small-claims action (if the amount fits the court’s limit), or hiring an attorney to bring a civil suit on the owner’s behalf or as assignee.

Evidence that strengthens a diminished value claim

• Pre-accident photos and receipts showing condition and maintenance.
• Repair invoices showing parts used, whether frame work occurred, and whether repairs were to “OEM” standards.
• Vehicle history reports showing an accident entry—these often cause buyers to pay less.
• Comparable vehicle sale listings that show a market drop for vehicles with prior damage.
• A professional diminished value or market appraiser report.

Timing and legal limits

Statutes of limitations and contractual deadlines affect when you must bring a claim. Utah law regulates insurance contracts and civil procedure; check Utah Code Title 31A (Insurance) and Title 78B (Civil Procedure) for timing rules that may apply to your claim. See:

• Utah Code Title 31A — Insurance
• Utah Code Title 78B — Civil Actions (procedure and limitations)

When to get an attorney

Consider hiring an attorney if:

• The insurer refuses to negotiate or pays a very low amount and the diminished value is substantial.
• The owner refuses to assign the claim but you can show you suffered a contractual or lease-related loss you must cover.
• Your case requires complex proof, expert testimony, or you expect the insurer to litigate the issue.

Helpful hints

• Always get the owner’s written assignment or authorization before pursuing or accepting payment for diminished value.
• Read the lease or loan agreement carefully—contracts often spell out who can pursue damage claims and who receives insurance proceeds.
• Document everything promptly: notes, phone calls, claim numbers, and names of insurer representatives.
• Ask for a written denial if an insurer rejects a diminished value demand; that helps if you escalate to mediation or court.
• Use market comparables and a vehicle-history report to show how much buyers discount vehicles that have been in collisions.
• Check consumer resources at the Utah Department of Insurance for claim-handling guidance: Utah Insurance Department.

Bottom line

If you don’t own the car, you generally cannot unilaterally collect diminished value under Utah law. The titled owner or a lender typically holds the right. With the owner’s written assignment or clear contractual authority (for example, certain lease terms), you can pursue diminished value. For large or contested claims, get an appraisal and consider legal help to protect your rights.