Alabama
Diminished Value Overview
In Alabama, a vehicle involved in a not at fault accident may lose market value even after repairs are completed. When another driver is responsible, Alabama law allows you to pursue compensation for that loss in value from the at fault driver’s insurance company as part of a property damage claim.
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01
Statute of Limitations
Alabama allows two years from the date of the accident to pursue a diminished value claim.
02
Third-Party Claims
Diminished value is recoverable when another driver is at fault, and you can file against the at-fault party’s insurance.
03
First-Party and Uninsured Motorist
Most Alabama auto policies exclude diminished value under first party coverage. Uninsured and underinsured motorist coverage do not apply to diminished value claims.
04
Small Claims Court Limit
Alabama small claims court allows cases up to $6,000.
Alabama Diminished Value Law
Alabama courts recognize that a vehicle does not automatically return to its original value simply because it has been repaired. When a vehicle is damaged in a collision, the resulting loss in market value may be recovered as part of a third party property damage claim.
King Motor Co. v. Wilson, 612 So.2d 1153 (Ala. 1992)
The Alabama Supreme Court acknowledged what the real world market already shows: a previously damaged vehicle is worth less than a comparable vehicle that has never been involved in an accident.
Coffee County Commission v. Smith, 480 So.2d 1194 (Ala. 1985)
Alabama courts have also made clear how this loss is measured. The court held that property damage is calculated by comparing the vehicle’s fair market value immediately before the damage to its value after the damage occurred.
Moebes v. Tony Moore Buick GMC Trucks, Inc., 709 So.2d 477 (Ala. 1997)
These principles are grounded in Alabama tort law, which requires that an injured party be made whole for the actual loss suffered.
The court reaffirmed that compensatory damages exist to reimburse real economic loss, not just repair costs.