Diminished value
Will filing diminished value raise my rates?
The short answer: it depends on whose policy pays. The normal claim is third-party — it runs on the at-fault driver's policy, and your insurer pays nothing — so filing it does not raise your rates. The rare first-party version, paid under your own collision coverage, rides along with a collision claim on your own policy, and that kind of claim can affect premiums. Ask your agent about the accident record itself, which is separate from any filing.
Two different claims, two different rate stories
Filing anything with an insurance company feels like it should count against you. With diminished value, first sort out which kind of claim you have, because the two kinds sit on completely different policies — and premiums are priced policy by policy.
- Third-party diminished value — you claim against the at-fault driver's insurer. This is the normal path most diminished value claims take. The other driver's policy pays for the repairs and, if you pursue it, for the loss in your car's value.
- First-party diminished value — you claim under your own policy, typically your own collision coverage. This is uncommon. Many policies do not cover it at all, and whether it exists for you depends on your policy and your state.
Almost everything reassuring on this page is about the first kind. Almost everything worth caution is about the second kind — or about the accident record itself, which exists whether or not you ever mention diminished value.
The third-party claim: money moves on someone else's policy
A premium is the price of your policy, set from your driving record, your coverage, and the claims paid under that policy. A third-party diminished value claim never touches it. The claim is presented to the at-fault driver's insurer, evaluated by that insurer, and paid under that driver's coverage. Your insurer pays nothing, and there is no payment on your policy for it to price against you.
That is why the rate fear points at the wrong mechanism here. Skipping a valid third-party claim does not buy you a lower premium. It just leaves the loss in value — visible to every buyer and dealer who later pulls your car's history report — sitting with you instead of with the insurer of the driver who caused it. If the other driver's insurer is handling the property damage, diminished value belongs in that same conversation.
The honest caveats: the accident itself is a separate record
Two caveats keep this answer honest, and both are about the accident — not about the diminished value filing.
First, if you reported the crash to your own insurer — to open a claim, to use your own collision coverage, or simply to put the accident on record — the accident itself may sit in your claims history regardless of whether you file for diminished value. That record came from reporting the crash, not from asking the other insurer about lost value.
Second, how insurers treat accident involvement — even in an accident that was not your fault — varies by state. Many states prohibit surcharges for accidents that were not your fault. Other states leave insurers more room, and your own state's rule is the version that applies to you. If you are unsure how your accident was recorded, that is a short, specific question for your own agent — worth asking before worry settles the matter for you.
The first-party exception: when the claim does ride on your policy
Where first-party diminished value exists at all — and in many places and policies it does not — a payment under your own collision coverage rides along with the collision claim itself. There is no separate, rate-free lane for it. It is evaluated and recorded the same way the underlying collision claim is.
That matters most when the collision was your fault. An at-fault collision claim is the kind that can affect premiums, because your insurer paid out on your policy for an accident you caused. The diminished value element creates no new rate problem on top of that — it travels with the existing claim — but it does not escape that claim's treatment either. A not-at-fault claim is treated differently in many states. Claiming through your own policy means your own collision claim and its usual consequences, not the separate third-party path above.
What to do before you decide
- Confirm which kind of claim you have. If another driver was at fault and their insurer is handling the damage, your diminished value claim is third-party. That confirmation alone answers the rate question for most drivers.
- Ask your agent how the accident itself is recorded. Ask whether the crash appears in your claims history and how your state treats not-at-fault accidents — about the accident record, separate from any filing.
- Do not trade away a third-party claim for rate protection it does not need. If the claim runs on the other driver's policy, declining it does not change your own pricing. Decide on its merits — the size of the loss and the strength of your documentation.
- If a first-party route is proposed, ask what it rides with. Ask whether the payment would be part of your collision claim and how that claim is being treated. That is the one setting where the rate question is real.
For the claim itself — what diminished value is and how it is documented — start with the hub guide, and see the guide on who pays if the question is whose policy is involved. If the other driver's insurer is stalling, you have options there too.
Frequently asked questions
Will a third-party diminished value claim raise my premium?
Generally no. A third-party diminished value claim is paid by the at-fault driver's insurer under that driver's policy, not by your insurer under your policy. Your premium is priced on your own policy and your own claims under it, so a payment that never runs through your policy does not by itself give your insurer a claim to price against you.
Can the accident itself affect my rates even if I was not at fault?
It can in some places, and that is separate from the diminished value filing. If you reported the crash, the accident may appear in your claims history even when another insurer paid. How insurers may treat accident involvement varies by state, and many states prohibit surcharges for accidents that were not your fault. Ask your agent how the accident itself was recorded.
What if I claim diminished value under my own collision coverage?
That is a first-party claim, and it rides along with the collision claim on your own policy. An at-fault collision claim is the kind that can affect premiums, while a not-at-fault claim is treated differently in many states. First-party diminished value cover is uncommon, and whether it exists at all depends on your policy and your state.
Should I skip a diminished value claim to protect my rates?
For a third-party claim, generally no, because the rate mechanism is not connected to it. The payment comes from the other driver's policy, so skipping the claim gives up money without changing how your own insurer prices you. If you are unsure, ask your agent how the accident itself is recorded before you decide to walk away.
Auto repair and insurance rules vary by state and by policy. Check your own policy documents and your state's insurance department, or talk to a licensed professional, before acting on a claim.
Diminished value and your rates, at a glance
| Situation | What it means for your rates |
|---|---|
| Third-party claim on the at-fault driver's policy | Does not run through your policy, so it does not by itself raise your premium |
| Accident reported to your own insurer | The accident itself may sit in your claims history, separate from any filing |
| Not-at-fault accident | Treated differently in many states, and many states prohibit a surcharge for it |
| First-party claim under your own collision cover | Rides with the collision claim, and an at-fault collision claim can affect premiums |
| Skipping a third-party claim | Gives up the loss in value without changing how your own insurer prices you |