What happens to a diminished value claim when you do not own the car? (Wisconsin)

Short answer: In Wisconsin, diminished value claims flow from the person or entity that owns a legal interest in the vehicle. If you are not the titled owner, your ability to claim diminished value depends on your legal relationship to the vehicle (for example: lessee, co-owner, lienholder, or someone who paid for repairs). If an insurer already paid for repairs, that insurer may have subrogation rights. Whether you can recover diminished value personally, or must work through the titled owner or an insurer, depends on title, the insurance policies, and any contract (lease or loan) that covers the vehicle.

What is “diminished value”?

Diminished value is the amount a vehicle’s market value drops after it has been damaged and repaired. Even when repairs are complete and the car looks fine, buyers often pay less for a vehicle with an accident history. Diminished value is the difference between the vehicle’s pre-accident market value and its post-repair market value.

Who can bring a diminished value claim in Wisconsin?

Only a person or entity with a legal property interest in the vehicle can normally pursue a diminished value claim. Typical parties who may have standing include:

• Titled owner (the name on the vehicle title)
• Lessee under a lease contract (depending on the lease terms)
• Lienholder or secured creditor (who has an interest if the vehicle is collateral for a loan)
• An insurer that paid for the loss and has subrogation rights

If you are a regular driver but are not the owner or on the title (for example: a spouse, family member, or friend who drove the car), you generally cannot file a diminished value claim in your own name. Instead, the titled owner needs to pursue the claim, or the owner’s insurer may pursue it on the owner’s behalf.

Common scenarios and how the process works

1) You are the titled owner

If the title is in your name, you can pursue diminished value directly against the at-fault driver’s insurer (a third‑party claim) or include it when your own insurer adjusts your loss (a first‑party claim). Document pre-loss value and post-repair value, demand payment, and be prepared to negotiate or seek appraisal/small-claims relief if needed.

2) You are leasing the car (lessee) but title is held by the leasing company

Many leases keep title in the lessor’s name. The lease contract usually controls who may make claims for loss in value. Some leases require the lessee to report damage and allow the lessor to handle claims; some give the lessee authority to pursue claims but require settlement proceeds to address outstanding loan/lease balances. Read the lease and notify the leasing company promptly. The leasing company (lessor) may instruct its insurer to pursue diminished value or assign the claim rights to you in limited circumstances.

3) You are not the owner but you paid for repairs

If you paid to repair someone else’s titled vehicle, your ability to recover diminished value is limited. The titled owner is the usual claimant. You may be able to recover repair costs from the at-fault party or their insurer if you can prove you incurred the expense and had permission to act, but diminished value generally follows title. Consider getting an assignment of rights from the titled owner if they are willing to assign their diminished value claim to you.

4) The vehicle is financed (lienholder on title)

A secured lender has a financial interest in the vehicle. If the car is totaled, the insurer pays the owner (subject to the lender’s security interest). For a diminished value claim when the vehicle is repaired, the owner usually pursues the claim, but the lender will be protected by its lien. If an insurer pays repair costs, the insurer may have subrogation rights to pursue the at-fault insurer for repair costs and possibly diminished value.

5) Your insurer paid for repairs

If your insurer covered repair costs under your own policy (first‑party), the insurer may have subrogation rights to recover its payment from the at-fault insurer. That insurer can choose to seek repair costs only, or it might also pursue diminished value. In some cases an insurer will offer you a settlement and retain subrogation rights; in others it may assign the subrogation (or diminished value) claim to you. Read your insurance contract and any assignment carefully.

Practical steps to take if you are not the titled owner

1. Confirm title and contract terms. Check who is listed on the title and any lease or loan agreement. If you do not have a copy, ask the titled owner or lienholder for the documents.
2. Talk to the owner. If the owner is willing, ask them to file the diminished value claim with the at-fault insurer or sign an assignment that transfers their claim to you.
3. Check insurance coverage. Ask both the owner’s and the at-fault party’s insurers whether they recognize diminished value claims in your situation. If your insurer paid for repairs, ask whether it will pursue diminished value through subrogation or assign the claim to you.
4. Gather evidence. Get photos from before and after the accident, repair invoices, an independent appraisal estimating diminished value (market-comparison, RV guides like Kelley Blue Book or NADA, and local comps), and the vehicle history report showing the accident.
5. Get an appraisal or professional report. A written diminished value report from a qualified appraiser will strengthen the claim—especially if the claim goes to negotiation or small claims.
6. Demand in writing. If you have standing (owner, assignee, insurer), send a written demand with your evidence to the at-fault insurer. Be clear about the amount and your supporting facts.
7. If denied, consider options. These include mediation, appraisal clauses (if in a contract), small-claims court, or hiring an attorney. If you are not the owner, you may need the owner’s cooperation or an assignment to proceed.

Notes about Wisconsin law and insurance

Wisconsin does not have a statute that specifically creates a separate diminished value claim with a unique statutory procedure. Diminished value claims are typically handled through contract principles, subrogation, and common-law property rights. Insurance regulation and insurer duties are governed by Wisconsin’s insurance statutes and administrative rules. For general insurance law you can consult Wisconsin’s insurance statutes, chapter 632: Wis. Stat. ch. 632 (Insurance). For issues about vehicle title and registration, see chapter 342: Wis. Stat. ch. 342 (Titles, Registration).

Because diminished value involves property rights and contract/subrogation questions, outcomes often depend on the precise facts—who holds title, what the lease/loan/insurance contracts say, whether the insurer already paid, and what evidence of loss you can produce.

Two brief hypotheticals

Hypothetical A — Leased vehicle

You lease a 2019 sedan. You report an accident; the lessor’s insurer pays for repairs. Later you believe the car lost value. The lessor holds title and the lease likely addresses insurance and claims. The lessor may file a diminished value claim or require the lessee to cooperate. Read the lease and contact the leasing company to learn their process.

Hypothetical B — You paid for repairs but are not the owner

You lend money to a friend to repair their car after an at-fault accident and want repayment for diminished value. Because your friend is the titled owner, only they (or their insurer) usually can claim diminished value unless they sign a written assignment granting you the right to pursue the claim. Get a written assignment if the owner is willing to transfer the claim to you.

Helpful Hints

• Always check the vehicle title and any lease or loan contract first; title control often controls who can sue.
• Obtain a written appraisal or market-comparison report for diminished value—insurers expect documentation.
• Keep repair invoices, photos, and a vehicle history report (CarFax or similar) to show the accident record.
• If your insurer paid, ask whether they will pursue subrogation or assign the claim to you in writing.
• If the titled owner will not cooperate, your remedies are limited unless you receive a written assignment of the claim.
• Small-claims court can be an effective venue for modest diminished value claims in Wisconsin; procedures are simpler and costs are lower.
• Document all conversations with insurers and the vehicle owner in writing and keep copies of demand letters and responses.

Where to look for help: If the facts are complex—multiple insurers, lease or loan disputes, or a denied claim—you may want to consult an attorney experienced in Wisconsin insurance and property claims or contact the Wisconsin Office of the Commissioner of Insurance for guidance about insurer practices.

Disclaimer: This article explains general legal concepts about diminished value in Wisconsin and is for educational purposes only. This is not legal advice. For advice about a specific situation, consult a licensed Wisconsin attorney.