California
Diminished Value Overview
In California, a vehicle involved in a not at fault accident may lose market value even after repairs are completed. When another driver is responsible for the accident, California law allows you to pursue compensation for that loss in value from the at fault driver’s insurance company as part of your property damage claim.
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01
Statute of Limitations
California allows three years from the date of the accident to pursue a diminished value claim.
02
Third-Party Claims
Diminished value is recoverable by filing a claim with the at fault driver’s liability insurance after another driver causes the accident.
03
First-Party and Uninsured Motorist
Standard first party coverage typically does not cover diminished value, and uninsured or underinsured motorist coverage generally does not apply to diminished value claims in California.
04
Small Claims Court Limit
California small claims court allows diminished value claims up to $12,500 for individuals and $6,250 when filing as a business.
California Diminished Value Law
California law recognizes that a vehicle may suffer a loss in market value after a collision even when it can be repaired. When another driver is at fault, that loss may be recovered as part of a third party property damage claim.
California Civil Jury Instruction CACI No. 3903J
Damages to an automobile are measured by the reduction in its fair market value. When a vehicle is repaired but is worth less after repairs than it was before the loss, damages may include both the reasonable cost of repair and the remaining difference between the vehicle’s value immediately before the damage and its value after repairs are completed.
The instruction further defines fair market value as the highest price a willing buyer would pay a willing seller, with neither under pressure and both having reasonable knowledge of the vehicle’s condition. This standard is used to evaluate whether a repaired vehicle continues to suffer a measurable loss in value following a collision.
California’s jury instructions confirm that repair alone does not automatically restore a vehicle to its pre loss value. When a repaired vehicle is worth less in the open market, that diminished value is a recognized element of economic damage.