Disclaimer

This article is for general informational purposes only and is not legal advice. I am not a lawyer. For advice about your specific situation, contact a licensed attorney in Wyoming or the Wyoming Department of Insurance: https://doi.wyo.gov/.

Detailed Answer — how the diminished value process works if you do not own the car (Wyoming)

“Diminished value” means the reduction in a vehicle’s market value after it has been damaged and repaired. In Wyoming, as elsewhere, the right to recover diminished value generally follows ownership and property-right principles. If you are not the titled owner of the vehicle (for example, it is financed and the lender is the title holder, or it is a leased vehicle and the lessor is the title holder), that ownership status determines who has the primary legal claim for diminished value.

Who has the right to recover diminished value?

• Titled owner: The person or entity on the vehicle title (owner, lienholder, or lessor) is the primary party with legal standing to claim diminished value from an at-fault driver or its insurer.
• Lessee (person who leases): A lessee often maintains contractual responsibilities under the lease. The lease may allow the lessor to pursue diminished value, or it may obligate the lessee to cover loss in value at lease-end. Read the lease for specific allocation of rights and duties.
• Driver who is not the owner: If you are not the titled owner, you typically cannot independently recover diminished value in your own name unless the owner assigns the claim to you in writing.

Common practical scenarios

Below are typical fact patterns and what to expect in each.

1. Car is financed (lender is lienholder on title)

The lender normally appears as a lienholder on title. The borrower (you) is the registered owner for most purposes but the lender holds a security interest. The lender or titled owner has the property interest necessary to demand diminished value from an at-fault party. In practice the lender often permits the registered owner (you) to pursue the claim or requires that settlement checks be endorsed by the lienholder. If you want to recover diminished value, you will usually either:

• Ask the titled owner/lienholder to make the claim, or
• Obtain a written assignment of the owner’s claim so you can pursue diminished value yourself.

2. Car is leased (lessor owns title)

The lessor (leasing company) is the titled owner. Lease contracts often specify who pays for repairs and loss in value. At lease-return, the lessor commonly charges the lessee for unrepaired damage and may seek compensation for diminished market value. If a third party caused the damage, the lessor can seek diminished value from the at-fault party’s insurer; the lessee should cooperate and may need to pay the lessor if the lessor cannot recover the full amount.

3. You are an authorized driver but not the owner

You should notify the titled owner promptly and help the owner submit a diminished-value demand if the owner chooses to do so. If the owner assigns the claim to you in writing, you can present the claim to the at-fault insurer under that assignment.

How the claims process typically works

1. Identify the titled owner: Check the vehicle title, registration, or the lease/finance paperwork. The titled owner holds the claim unless they assign it.
2. Report the accident: Notify your insurer (if you have one) and the at-fault driver’s insurer. Be clear who is the titled owner.
3. Document damage: Take photos, keep repair invoices, and get a vehicle history report (to show pre- and post-accident condition) and independent diminished-value appraisal if needed.
4. Demand for diminished value: The titled owner or an assignee sends a demand to the at-fault insurer with appraisal and market evidence showing the loss in value after repairs.
5. Insurer response and negotiation: The at-fault insurer reviews evidence and either pays, denies, or negotiates. If the insurer pays the owner but the vehicle is financed, the lienholder may require payoff or endorsement on the check per lien requirements.
6. Litigation or settlement: If the insurer refuses to pay a fair amount, the titled owner may sue for property-damage compensation, which can include diminished value.

What if the insurer already paid repair costs?

Paying repair costs does not always resolve diminished value claims. Insurers sometimes pay for repairs only; the vehicle can still have a diminished market value after repair. The title owner may still demand additional payment for diminished value. If you are not the owner, the owner must press this claim or assign it to you.

What role can your own insurance play?

If you carry collision coverage, your insurer can pay for repairs and you may assign your rights against the at-fault party to your insurer so it subrogates. Subrogation recovers insurer’s repair payment, and it may cover diminished value only if your policy or state law supports that recovery. Read your policy and talk with your insurer.

Documentation you will need

• Photos of damage and repairs (before/after).
• Repair invoices and estimates.
• An independent diminished value appraisal or market-comparison report.
• Vehicle history report showing accident entry.
• Title/registration (to show who can make the claim) and any lease or finance agreement.
• Written assignment if the titled owner assigns the claim to you.

Practical tips about recoveries and payments

• If the car has a lien, the lienholder may require settlement checks be paid to them or co-signed. Coordinate with the lender early.
• For leases, read the lease: some require the lessee to pay loss in value at lease-end and others allow the lessor to pursue the insurer directly.
• If you expect to be held responsible by the titled owner (for example, a rental, borrowed car, or employer vehicle), get the owner’s cooperation to pursue the third party insurer or plan for internal reimbursement if the owner cannot collect.

When to consult an attorney

Consider talking with a licensed Wyoming attorney if:

• The at-fault insurer refuses to pay a reasonable diminished value demand.
• There is a dispute about who owns the claim or the titleholder refuses to cooperate.
• You face potential liability to a lessor or lienholder for diminished value.

For general consumer information about auto insurance rules and complaint procedures in Wyoming, see the Wyoming Department of Insurance: https://doi.wyo.gov/. For Wyoming legislative resources, visit the Wyoming Legislature site: https://www.wyoleg.gov/.

Helpful Hints — steps to protect yourself and speed recovery

• Immediately confirm who is the titled owner and keep a copy of the title/finance/lease paperwork.
• Photograph all damage before repairs and keep all repair invoices and parts receipts.
• Request an independent diminished-value appraisal early if you plan to make a claim.
• If you are a lessee, notify the lessor and follow the lease’s notice/repair procedures to reduce disputes at lease-end.
• If the owner is uncooperative but you paid for repairs, get a written assignment of the owner’s claim before pursuing the at-fault insurer yourself.
• Ask your insurer if your collision or other optional coverages can apply to diminished value or if they will subrogate on your behalf.
• Keep communications in writing (email or certified mail) so you have a record of demands and responses.
• If negotiations stall, consider a short consultation with a Wyoming attorney experienced in auto damage claims to learn the likely outcome and costs of litigation.