Diminished value claims in New Jersey

Claims against the at-fault driver

In Fanfarillo v. East End Motor Co. (1980), the Appellate Division said the measure of damages is the difference between the car's value before and after the injury, and approved an award of repair cost plus depreciation, so long as the sum does not exceed the decline in market value or the pre-accident value.

In Financial Services Vehicle Trust v. Panter (2019), the Appellate Division held that an owner may recover for an additional reduction in value when a vehicle has become less desirable for resale because of the stigma of having once been damaged. The court treated the accident history in vehicle-history databases as a real loss, and held that an expert's valuation without a physical inspection goes to weight, not admissibility.

Claims under your own policy

In Kieffer v. High Point Insurance Co. (2011), the Appellate Division held that policies with "repair or replace" limits and express exclusions for loss in market or resale value did not cover diminished value, and that those exclusions were enforceable because collision coverage is optional.

Kieffer turned on policies with express exclusions. The wording of your own policy controls.

Filing deadline

New Jersey gives six years after the cause of action accrues for any tortious injury to real or personal property (N.J. Stat. 2A:14-1).

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

How diminished value claims tend to go in New Jersey

New Jersey's claims rule gives an insurer 45 calendar days from notice to settle a third-party property damage claim, with written delay letters and updates every 45 days after that, and agreed settlements paid within 10 working days (N.J.A.C. 11:2-17.7).

Panter also held that the person bringing the claim has to own it. On a leased or financed car, check who holds the claim before sending it.

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 New Jersey Department of Banking and Insurance takes written consumer complaints about how an insurer handled a claim. File with the New Jersey Department of Banking and 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 Delaware
• Diminished value claims in Connecticut
• Diminished value rules in every state