What is the definition of Diminution of Value?

Diminution of value means that the financial worth of something is diminished due to damage.

Also called diminished value, this refers to property, vehicles and other financial investments that lose their value. The amount of the diminished value is dependent on the level of damage.

For example, a car can have diminution of value based on a problem that was inherent in the car (when it was manufactured and not directly caused by any accident) or based on the repairs made after damaged caused by an accident.

For auto insurance, diminution of value can be claimed when it was the other person who was at fault in the accident. This will be paid off by the other person's insurance company. If the driver is the one at fault, this will become a first-party claim.

• Businessowners Policy / BOP
• Competitive State Fund
• Excess and Surplus Lines
• Employer’s Liability
• Blanket Insurance