Don’t Forget Diminished Value | Nordgren Law: Automotive Litigation and Lemon Law

Generally, when property is damaged because of the fault of another, the primary objective is to restore that property to its condition immediately before the accident. In the context of an automobile accident, this often means the at-fault driver will simply pay to repair the vehicle; however, the cost of repair isn’t the only compensation to which a victim is entitled.

Practically speaking, if faced with purchasing two identical cars, one of which was involved in an accident and one of which was not, most of us would pay less for the vehicle involved in the accident. Regardless of how well it was repaired, the value of the vehicle is lower because of the accident.

A plaintiff may be entitled to compensation for this. For example, in Smith v. Midland Risk Insurance Co., the Second Circuit Court of Appeals held that a plaintiff was entitled to compensation for the depreciated value of their vehicle due to the accident, and they were entitled to this compensation regardless of the repair quality. The reasoning is that when an at-fault driver simply pays for the cost of repair, the victim isn’t truly made whole because they now have a vehicle that isn’t worth as much.

These damages are rarely sought by a claimant and even more rarely awarded by an insurance company – but they should be. Louisiana law allows for the recovery of these damages and the client deserves them.