Diminished value claims in Maryland

Claims against the at-fault driver

In Fred Frederick Motors, Inc. v. Krause (1971), Maryland's Court of Special Appeals held that if the owner can prove that after repairs the vehicle has a diminished market value from being injured, the owner can recover that diminution in addition to the cost of repairs, provided the two together do not exceed the diminution in value before the repairs.

The court read the earlier Taylor v. King (1965) decision as requiring repairs to restore market value, not only appearance and function.

Claims under your own policy

Maryland Insurance Administration Bulletin 24-8 (April 12, 2024) says that under Md. Ins. Code 19-509(c), uninsured motorist property damage coverage must cover diminution in value when proven, on the same terms as liability property damage coverage. An exclusion of diminished value from that coverage is unenforceable.

The same bulletin says collision and comprehensive coverage are not required by statute, so their wording controls whether lost value is covered. No Maryland appellate decision on collision coverage was found.

Filing deadline

Maryland gives three years from the date a civil action accrues, unless another provision sets a different period (Md. Code, Cts. & Jud. Proc. 5-101).

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

How diminished value claims tend to go in Maryland

For claims under an owner's own property and casualty coverage, Maryland's first-party claims statute (Md. Ins. Code 27-1001) sends the dispute to the Maryland Insurance Administration first, which decides within 90 days. Md. Ins. Code 27-303 separately bars refusing to pay a claim for an arbitrary or capricious reason.

When the at-fault driver was uninsured or underinsured, Bulletin 24-8 addresses diminished value under uninsured motorist property damage coverage.

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 Maryland Insurance Administration takes consumer complaints about how an insurer handled a claim. File with the Maryland Insurance Administration.

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 Delaware
• Diminished value claims in New Jersey
• Diminished value rules in every state