Tennessee
Diminished Value Overview
In Tennessee, when a vehicle is damaged in a not at fault accident, property damage claims are governed by general tort principles requiring that an injured party be made whole. Tennessee law does not contain a statute or controlling appellate decision that expressly addresses automobile diminished value claims. However, courts evaluate property damage based on the difference in a vehicle’s fair market value immediately before and after the loss, or the reasonable cost of repair, depending on the facts of the case.
Because Tennessee law does not expressly prohibit recovery for post repair loss in value, claims alleging diminished market value may be asserted as part of a third party property damage claim when supported by competent evidence and where repairs do not fully restore the vehicle’s pre loss value.
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01
Statute of Limitations
Tennessee provides one year from the date of the accident to pursue a property damage claim arising from negligence.
02
Third-Party Claims
Property damage claims in Tennessee are pursued against the at fault driver’s liability insurance carrier. When another driver is responsible for the accident, claims for uncompensated loss in value may be presented as part of the overall property damage claim, subject to proof and applicable damage limitations.
03
First-Party and Uninsured Motorist
Most automobile insurance policies issued in Tennessee do not expressly provide coverage for diminished value under first party physical damage coverage. Uninsured or underinsured motorist property damage coverage generally applies only to amounts the insured is legally entitled to recover and remains subject to policy language and exclusions.
04
Small Claims Court Limit
Tennessee small claims court allows claims up to $25,000.
Tennessee Diminished Value Law
Tennessee does not have a statute or appellate court decision that expressly addresses automobile diminished value by name. Instead, Tennessee courts apply general property damage principles to determine the proper measure of damages when a vehicle is damaged due to another party’s negligence.
Under Tennessee law, damages to personal property are generally measured either by the reasonable cost of repairs or by the difference in the vehicle’s fair market value immediately before and immediately after the loss. Tennessee courts have not expressly recognized a separate category of post-repair diminished value, nor have they issued a decision directly prohibiting recovery for such loss. As a result, diminished value claims in Tennessee are evaluated within the broader framework of traditional property damage principles rather than under a distinct diminished value rule.
GEICO v. Bloodworth, No. E2006-01827-COA-R3-CV (Tenn. Ct. App. 2007)
In GEICO v. Bloodworth, the Tennessee Court of Appeals addressed a first-party insurance dispute involving a claim for diminished value after repairs were completed. The court held that the insurance policy at issue did not require payment for an alleged post-repair loss in value. The decision did not establish a general rule governing third-party diminished value claims, but instead applied Tennessee’s existing property damage framework and policy interpretation principles.
Grimes v. Hancock, No. M2011-01940-COA-R3-CV (Tenn. Ct. App. 2012)
In Grimes v. Hancock, the Tennessee Court of Appeals explained that damages for injury to a vehicle are measured by either the reasonable cost of repairs or the difference in market value immediately before and immediately after the accident. The court emphasized that Tennessee law limits recovery to a single measure of damages, but did not address or define diminished value as a separate post-repair element of recovery.