Diminished Value (Wertminderung)

Concept

Diminished value refers to the residual loss in value of a damaged and subsequently repaired item, particularly a vehicle, that remains despite proper and complete repair compared with its condition before the loss event. What matters here is not any remaining technical defect, but the so-called inherent diminished value – the reduced marketability of the vehicle solely due to its disclosable accident history.

Requirements and Assessment

A claim for compensation for diminished value generally requires that the vehicle, despite proper repair, retains a permanent, market-relevant loss in value, which is particularly the case for newer vehicles with low mileage and for significant damage to structural vehicle components; for very old vehicles or purely cosmetic minor damage, diminished value is generally denied. The amount is usually assessed by an expert appraisal using recognized calculation methods.

Relevance in Motor Liability and Own-Damage Insurance

Diminished value is particularly relevant within the tortfeasor’s motor liability insurance as a distinct head of loss alongside the pure repair costs, since the injured party has a claim to full restoration of their economic position before the accident; under own-damage (comprehensive/collision) insurance for one’s own vehicle, by contrast, compensation for diminished value is often not provided, or only to a limited extent, since such cover primarily addresses repair or replacement value.