Diminished value claims in Delaware

Claims against the at-fault driver

The 50-state survey we rely on found no reported Delaware decision on lost value after repair in a claim against the at-fault driver. The question is unsettled, so general damages rules apply: the owner has to show what the car was worth before the crash and what it is worth after repair.

The O'Brien decision discussed below was about the owners' own policies. It did not decide what an at-fault driver owes.

Claims under your own policy

In O'Brien v. Progressive Northern Insurance Co. (2001), the Delaware Supreme Court held that policy wording letting the insurer "repair or replace" the car is not ambiguous and does not contemplate payment for lost value. Under that wording, the insurer's limit is the cost of returning the car to substantially the same physical, operating, and mechanical condition it had before the loss.

An earlier Superior Court decision, Delledonne v. State Farm (1992), had read similar wording the other way. O'Brien is the controlling decision now. The wording of your own policy still controls what it covers.

Filing deadline

Delaware gives two years from the accruing of the cause of action to sue for injury to personal property (10 Del. C. 8107). That is shorter than the three years Delaware allows for many other actions under 10 Del. C. 8106, so the two-year date is the one to plan around for car damage.

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

How diminished value claims tend to go in Delaware

Expect a first-party request to be declined under O'Brien. A third-party request turns on proof of the drop in value after repair.

Delaware's insurance code lists unfair claim settlement practices, including failing to acknowledge and act reasonably promptly on claim communications and not attempting in good faith to reach prompt, fair settlements of claims where liability has become reasonably clear (18 Del. C. 2304(16)).

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 Delaware Department of Insurance's Consumer Services Division takes complaints about how an insurer or agent handled a claim. File with the Delaware Department 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 Maryland
• Diminished value claims in New Jersey
• Diminished value rules in every state