Colorado Diminished Value Claims

In the event of an auto accident in Colorado, the value of your vehicle can suffer a significant blow. Even after repairs have been made, a crash history can result in a diminished resale value. Factors such as lower quality replacement parts, buyer reluctance due to the accident history, compromised warranties, and undiscovered damages can all contribute to a decrease in the value of a wrecked vehicle. Fortunately, owners have the option to pursue diminished value claims, which allow them to seek compensation for the reduced value of their vehicles.

If you sustained injuries in an accident in Colorado, contact the personal injury lawyers at Front Range Injury Attorneys today to schedule your free consultation. Our experienced legal team are knowledgeable and zealous advocates for our clients and their cases. We treat our clients as people, not case files. Learn more about how we can help you pursue compensation for your injuries and damages. Contact our Denver law firm to learn more.

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Understanding Diminished Value Claims under Colorado Law

Colorado follows a fault-based car insurance law to determine liability for damages resulting from a car accident. If you experience property damage or personal injuries due to someone else’s negligence, you can hold them financially responsible. This includes seeking compensation for the diminished value of your vehicle.

What Is Diminished Value?

Diminished value refers to the reduction in a vehicle’s market value after it has been involved in an accident and subsequently repaired. Even if a car has been expertly repaired, the fact that it has a history of damage can negatively impact its value. Essentially, diminished value accounts for the perception that a repaired vehicle is worth less than a comparable vehicle with no accident history.

The amount of diminished value can be influenced by several factors, including the age and condition of the vehicle, the severity of the accident, the extent of the damage, and the quality of repairs. Generally, newer vehicles with significant damage and poor repairs will experience higher levels of diminished value.

What Are the Types of Diminished Value Claims under Colorado Law?

There are three main types of diminished value: inherent, repair-related, and immediate. Inherent diminished value accounts for the stigma attached to a vehicle with an accident history. Repair-related diminished value considers any deficiencies in the repair work. Immediate diminished value refers to the immediate reduction in value right after the accident. You may have a diminished value claim under Colorado law for one or more types of lost value:

1. Immediate diminished value: This refers to the difference in value between your vehicle prior to the accident and its current value, before any repairs have been made.

2. Inherent diminished value: Even after repairs have been completed, the fact that the car has been in an accident can cause inherent diminished value. Prospective buyers perceive the vehicle as less valuable due to its accident history.

3. Repair-related diminished value: In cases where repairs are not carried out properly, the vehicle’s value can be diminished as a result of problematic, incomplete, or low-quality repairs.

Among these, inherent diminished value claims are the most common. If the value of your vehicle is lower than it was before the accident, despite receiving quality repairs that restore the car’s pre-crash condition, you may be eligible for this type of insurance claim. Pursuing any form of diminished value claim in Colorado can potentially bridge the gap between your vehicle’s pre-accident value and its current worth.

Preparing the Claim

  1. Writing a Demand Letter

Compose a demand letter addressed to the insurance company, clearly stating your claim for diminished value. Explain the circumstances of the accident, provide evidence, and state the amount you are seeking as compensation.

  1. Including Supporting Documents

Attach all relevant supporting documents, such as the accident documentation, repair records, vehicle appraisal report, and the comparative market analysis. These documents will strengthen your claim and provide undeniable proof of the diminished value.

Negotiating Your Diminished Value Claim

It’s important to note that your personal auto insurance policy usually does not cover diminished value. Typically, you’ll need to establish a case against another driver for negligence or recklessness in order to seek compensation for your vehicle’s diminished value. The success of your claim and the amount of compensation you receive will often depend on your negotiation skills with the at-fault driver’s insurance company. Here are some tips to help you achieve the best possible outcome:

1. Gather the facts: Obtain as much information as possible about your case, including the value of your vehicle before the accident and its current value. Utilize resources like Kelley Blue Book and seek in-person auto appraisals to determine these amounts. Gathering evidence will strengthen your claim.

2. Be cautious with information: When negotiating or speaking with a claims adjuster, avoid divulging excessive details. Only answer the questions asked and refrain from admitting fault. Whenever possible, provide concise yes or no answers instead of lengthy narratives. Remember, the insurance company could potentially use your statements against you.

3. Don’t settle for less: Insurance adjusters often undervalue diminution of value claims to maximize their profits. Before accepting an initial settlement offer, consult with a reputable Denver car accident attorney to assess the true value of your claim.

If you were not at fault for the accident, you shouldn’t have to bear the related costs. A successful diminished value claim in Colorado can compensate you for the financial losses stemming from the reduction in your vehicle’s value. However, persuading an insurance company to offer a fair amount for your vehicle’s diminished value can be challenging. In such cases, enlisting the assistance of a car accident lawyer can significantly improve your chances of a favorable outcome. Consider filing your claim with the support of an experienced attorney for the best possible results.

Remember, protecting your vehicle’s worth after an accident is crucial. By understanding the ins and outs of diminished value claims in Colorado and employing effective negotiation strategies, you can ensure that you receive the compensation you deserve.


  1. What is the statute of limitations for filing a diminished value claim? The statute of limitations for filing a diminished value claim varies by state. It is important to consult the specific laws in your jurisdiction and file your claim within the designated time frame. In Colorado, most negligence claims involving auto accidents is three years.
  2. Can I negotiate a diminished value claim without an attorney? Yes, you can negotiate a diminished value claim without an attorney. However, seeking legal advice can be beneficial, especially if you encounter difficulties during the negotiation process.
  3. How long does the negotiation process typically take? The negotiation process for a diminished value claim can vary depending on various factors, such as the complexity of the case and the responsiveness of the insurance company. It can range from a few weeks to several months.
  4. Is it possible to file a diminished value claim for older vehicles? Yes, it is possible to file a diminished value claim for older vehicles. However, the diminished value amount may be lower compared to newer vehicles due to factors such as depreciation.
  5. What if the insurance company denies my claim? If the insurance company denies your diminished value claim, you may consider seeking legal assistance or exploring alternative dispute resolution methods such as mediation or arbitration to resolve the issue.

Colorado Car Accident Lawyers

If you suffered injuries in an auto accident caused by someone else’s negligence, you may be entitled to compensation for your injuries, medical bills, lost wages and other damages. Our experienced Colorado car accident lawyers help clients across the state pursue full and fair compensation for their accident-related injuries and financial losses. We help clients in Colorado with a wide range of motor vehicle collisions involving different types of vehicles, crashes and severity of impacts. Contact our law firm to discuss:

Although most of our motor vehicle collision clients hail from Denver, we also help clients in other parts of Colorado, including:

No matter the type of auto accident or location in Colorado, our law firm is ready to talk to you about your case. Front Range Injury Attorneys offers free consultations for car crash cases so you can speak with our experienced personal injury lawyers at no cost and no obligation.

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