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Total Loss, Loss of Use & Diminished Value Claims


What does the insurance company have to pay?

An insurance company’s obligation to pay a claim for damage to someone’s vehicle or property arises out of the insurance policy. On a typical claim, the insurance company will pay on behalf of their driver those amounts that the driver is responsible for. This may include towing fees, storage fees, loss of use, diminished value, repair costs, and/or the actual cash value of a vehicle deemed to be a total loss.

What is a total loss and how much should I get for it?

Generally, if the cost of repair is less than 75% of the value of the vehicle, the insurance company may pay for the cost of repairs. If the damage sustained in the collision exceeds 75% of the value of the vehicle, the insurance adjuster may determine that the vehicle is a total loss. The amount that the insurance company may be willing to offer for the total loss of a vehicle is its Actual Cash Value, which is dependent on several factors, including, but not limited to: the selling price of similar vehicles nearby adjusted for comparable mileage, the age and condition of the vehicle, whether pre-existing damage existed to the vehicle, and whether the vehicle had improvements outside of normal maintenance.

What is loss of use?

Loss of use damages arise when someone is not able to use their vehicle. To make a claim for loss of use, the insurance company may demand several documents to prove loss of use.

What is a diminished value claim?

Diminished value is basically the difference in the value of a vehicle before and after the repairs. It is also called depreciation or diminution in value. However, if the repairs make the vehicle the same as it was before it was damaged, then only the cost of repairs may be recovered. If your vehicle is repairable and you want to seek diminution in value, after the repairs are completed to your satisfaction, you can ask the insurance company to open and assess your diminished value claim.