Diminished value claims in Michigan

Can you claim diminished value in Michigan?

Short answer: Only in limited cases against the at-fault driver's insurer (MCL 500.3135(3)(e)).

Under no-fault, tort liability for vehicle damage is abolished except for the mini-tort: up to $3,000 (accidents after July 1, 2020; $1,000 before) for damage not covered by insurance. Any third-party DV recovery therefore falls within that cap, and no Michigan appellate decision confirming DV under the mini-tort was found. First-party: Driscoll v. State Farm (E.D. Mich. 2002) held 'repair or replace' policies limiting coverage to the lesser of ACV or repair cost do not require payment of diminished value.

Source: MCL 500.3135(3)(e); Driscoll v. State Farm Mut. Auto. Ins. Co., 227 F. Supp. 2d 696 (E.D. Mich. 2002)

See which states allow diminished value claims.

Does your own insurance pay diminished value in Michigan?

Short answer: Usually not. The claim is normally against the at-fault driver's insurer.

A claim on your own collision coverage depends on what your policy promises. Read its definition of "loss" and any exclusion for diminution in value before you ask. The Michigan rule above is the starting point; your policy wording can narrow it.

How to file a diminished value claim in Michigan

1. Finish the repair and get the final invoice showing every part and labor operation.
2. Document the pre-accident value of your exact trim and mileage.
3. Collect proof of the loss: a vehicle history report showing the accident, written trade-in offers, or an independent appraisal.
4. Send a written demand to the at-fault driver's insurer with a specific amount and your evidence.
5. If they refuse or lowball, you can sue the at-fault driver in small claims court before the deadline.

How to document the value before and after

• Before: save listings for cars of the same year, trim and mileage from just before the accident, and any records of options, upgrades and maintenance.
• After: get at least two written trade-in or purchase offers from dealers who see the repaired car and its history report.
• Keep the repair invoice, photos of the damage and the history report entry; they show what a buyer will see.

Step-by-step help with each part: how to file a diminished value claim.

Will the insurer use the 17c formula in Michigan?

Many adjusters calculate diminished value by capping it at 10% of the car's value and then applying damage and mileage multipliers. The result is often a few hundred dollars. It is not based on what buyers actually pay, and you do not have to accept it. How the 17c formula works.

Deadline to file a diminished value claim in Michigan

Short answer: You generally have 3 years to sue the at-fault driver for damage to your car (MCL 600.5805(2)). Send your written demand well before then.

Property damage claims in Michigan generally must be filed in court within 3 years of the accident.

Source: MCL 600.5805(2)

How to file an insurance complaint in Michigan

Short answer: File a free complaint with the Michigan Department of Insurance and Financial Services online. It asks the insurer for a written response, but it cannot set the amount you are owed.

If an insurer ignores your claim or will not explain a refusal, the state insurance regulator takes complaints.