Diminished value claims in Colorado

Claims against the at-fault driver

Colorado's model civil jury instruction 6:12 lets a jury award the reasonable cost of repair plus the decrease in market value, if any, of the property as repaired. If those two together exceed the property's value before the crash, the award is capped at that value.

The Colorado Supreme Court described the basic measure in Trujillo v. Wilson (1948): the difference in value immediately before and after the damage, plus reasonable costs to preserve or restore it.

Claims under your own policy

In Hyden v. Farmers Insurance Exchange (2000), the Colorado Court of Appeals read a promise to repair with parts "of like kind and quality" to mean the insured should end up with a vehicle substantially similar in both function and value. Under that wording, the insurer had to account for lost value through repair, replacement, or payment.

Many insurers have since changed their policy language. Whether your own policy covers lost value depends on its exact wording.

Filing deadline

Colorado gives three years to file tort actions for bodily injury or property damage arising out of the use or operation of a motor vehicle (Colo. Rev. Stat. 13-80-101(1)(n)). Most other tort claims in Colorado have two years, so the motor vehicle rule matters.

That is the deadline for filing suit. A Colorado attorney can confirm how it applies to your dates.

How diminished value claims tend to go in Colorado

On a first-party request, insurers commonly point to the policy's limit of liability wording, which is why Hyden turns on the exact words used. On a third-party request, the question is usually proof of the drop in value after repair.

Many insurers answer a diminished value request with a formula rather than a market study. The best known is the 17c formula, which came out of the Georgia class actions over first-party claims that followed State Farm v. Mabry; its name comes from paragraph 17(c) of an injunction in one of them. It starts from a capped share of the car's value before the crash, then reduces it with damage and mileage modifiers. A law-firm survey notes it was built for that class action and has not been formally adopted for general use.

Adjusters commonly ask for proof that the repaired car is worth less, not only proof that it was damaged. Records that tend to matter: the final repair invoice and photos, the estimate showing any structural or frame work, the vehicle history report entry, and written market evidence such as dealer quotes or listings for the same car with and without an accident history.

Lost value is easiest to show once repairs are finished, because the value after repair is what gets compared with the value before the crash.

If you have a complaint about claim handling

The Colorado Division of Insurance takes consumer complaints about how an insurer handled a claim. File with the Colorado Division of Insurance.

Next steps

• How Reclaim's diminished-value check works
• Estimate a figure with the diminished value calculator
• How to file a diminished value claim
• Diminished value claims in Utah
• Diminished value claims in Texas
• Diminished value rules in every state