Diminished value claims in Michigan

Claims against the at-fault driver

Under Michigan's no-fault act, tort liability from the use of a motor vehicle in Michigan is abolished except in listed cases (Mich. Comp. Laws 500.3135(3)). One listed case is damage to a motor vehicle, to the extent it is not covered by insurance: up to $1,000, or up to $3,000 for crashes after July 1, 2020. This is commonly called the mini-tort.

Mini-tort damages are assessed on comparative fault, and the statute bars recovery by a party who is more than 50% at fault (Mich. Comp. Laws 500.3135(4)).

The survey we rely on found no Michigan decision on lost value after repair in a claim against the at-fault driver, and we found none deciding whether lost value counts toward the mini-tort. The question is unsettled.

Claims under your own policy

In Driscoll v. State Farm (2002), a federal court in Michigan held that policies promising to repair or replace the car, with coverage limited to the lesser of actual value or repair cost, did not require payment for lost value.

Policies differ. The wording of your own policy controls.

Filing deadline

Michigan's general period for actions to recover damages for injury to a person or property is three years (Mich. Comp. Laws 600.5805(2)).

That is the deadline for filing suit. A Michigan attorney can confirm how it applies to a mini-tort claim and your dates.

How diminished value claims tend to go in Michigan

Michigan's insurance code requires insurers to pay claims on a timely basis, including claims by third-party tort claimants, or pay 12% interest on claims not paid on time unless the claim is reasonably in dispute (Mich. Comp. Laws 500.2006).

Mini-tort claims are usually made directly to the at-fault driver or that driver's insurer, and the amount is limited to damage not covered by insurance, so records of what your own coverage paid matter.

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.

If you have a complaint about claim handling

The Michigan Department of Insurance and Financial Services takes complaints about how an insurer handled a claim. File with the Michigan Department of Insurance and Financial Services.

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 Ohio
• Diminished value claims in Indiana
• Diminished value rules in every state