Diminished value claims in Washington

Claims against the at-fault party

In Grothe v. Kushnivich (2022), a published decision, Washington's Court of Appeals held that when property is not a total loss and a market value for the repaired car exists, damages are measured by the difference between its market value before and after the loss. If the evidence shows the repaired car has a lower market value, recovery for the difference is proper and is not a double recovery. Loss of use is also recoverable.

Grothe arose from a car damaged in transport, but the court applied Washington's general rule for damaged property, from McCurdy v. Union Pacific Railroad (1966).

Claims under your own policy

In Moeller v. Farmers Insurance Co. of Washington (2011), the Washington Supreme Court held that Farmers' policy, which promised to pay to repair or replace with property of like kind and quality, provides coverage for diminished value after a car is repaired. The court described diminished value as physical damage that cannot be fully restored to its preloss condition, and distinguished stigma damages, which it called generally disfavored.

Moeller depends on the policy wording. A policy with a diminished value exclusion or "lesser of" wording may read differently, so check your own policy.

Filing deadline

Washington gives three years for an action for taking, detaining, or injuring personal property (Rev. Code Wash. 4.16.080(2)).

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

How diminished value claims tend to go in Washington

Washington's motor vehicle claims rule bars an insurer from steering a claimant to the claimant's own collision coverage solely to avoid paying under the liability policy when liability and damages are reasonably clear (WAC 284-30-390). Washington's rules also set a 10-working-day clock for acknowledging claims and answering claim communications (WAC 284-30-360).

On a first-party request, insurers commonly point to the line Moeller drew between physical diminished value and stigma, so evidence tied to the repair itself, such as structural or frame work, matters.

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 Washington Office of the Insurance Commissioner takes consumer complaints about how an insurer handled a claim. File with the Washington Office of the Insurance Commissioner.

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 Idaho
• Diminished value claims in California
• Diminished value rules in every state