Maryland does not recognize diminished value claims in most cases
If your car is damaged in an accident and then repaired, you cannot recover money from the at-fault driver's insurance for the loss in resale value — even if the repair is perfect and the car runs normally. Maryland is a no diminished value state, meaning the law does not allow you to claim that damage to your vehicle's history reduces what you could sell it for later.
This rule applies whether you own the car outright or are still paying a loan. It also applies whether the accident was minor or severe. The only money you can recover is the actual cost of repairs, minus your deductible if you filed through your own insurance.
A handful of states — Georgia, South Carolina, and a few others — do allow diminished value claims. Maryland is not one of them. Understanding this rule matters because many accident victims assume they can recover this cost and waste time pursuing a claim that Maryland courts will dismiss.
Key Takeaways
- Maryland law does not permit you to recover money for the drop in resale value after an accident, even if the repair is done well.
- You can recover the full cost of repairs from the at-fault driver's insurance, but only the repair cost itself, not future lost value.
- This rule applies to all vehicle owners in Maryland regardless of the accident's severity or the quality of the repair work.
- If you file a claim through your own collision coverage, your deductible reduces the payout, and you cannot recover that deductible from the other driver's insurance.
What you can and cannot recover in Maryland
Maryland allows you to recover the actual cash value of repairs needed to restore your vehicle to its condition before the accident. This is straightforward: get repair estimates, submit them to the at-fault driver's insurance company, and they pay for the work (or pay you directly if you prefer to handle repairs yourself).
You cannot recover money for:
- The vehicle's reduced resale value after repair
- The inconvenience or time spent dealing with the accident
- Rental car costs, unless your insurance policy includes rental coverage
- Loss of use of the vehicle while it is being repaired, unless you have that coverage in your own policy
If the repair cost exceeds the vehicle's market value before the accident, the insurance company will declare it a total loss and pay you the vehicle's pre-accident value instead. You then own the salvage title and can sell the vehicle for parts or scrap.
Why Maryland has this rule
Maryland follows what is called the repair cost rule. The reasoning is that once a vehicle is properly repaired, it is restored to working condition, and the owner has been made whole. The law does not recognize a separate harm from the fact that a future buyer might pay less because of the accident history.
This approach differs from states that recognize inherent diminished value — the idea that even a perfectly repaired car is worth less because buyers know it was in an accident. Georgia and South Carolina allow claims for this loss. Maryland's courts have rejected this theory, holding that the repair itself is the remedy.
The practical effect is that Maryland accident victims bear the cost of the accident's impact on resale value. Insurance companies in Maryland do not have to account for this loss, which keeps premiums lower than they would be in diminished value states.
How to file a claim for repair costs
Start by getting written repair estimates from at least one body shop, preferably two. The at-fault driver's insurance company will often send an adjuster to inspect the vehicle and may use their own estimate, but you have the right to submit your own.
Contact the at-fault driver's insurance company directly. Provide your policy number, the accident date, the police report number if one exists, and the repair estimates. The insurance company will assign a claim number and an adjuster.
The adjuster will either approve the estimate, request additional repairs, or dispute the estimate's cost. If you disagree with their valuation, you can request an independent appraisal. Many insurance policies include an appraisal clause that allows either party to demand a neutral third-party assessment if the two sides cannot agree on repair cost.
Once the repair cost is agreed upon, the insurance company will either pay you directly or pay the repair shop. If you file through your own collision coverage instead, your deductible applies, and you would need to pursue the at-fault driver separately to recover it (though many people do not pursue this small amount).
The difference between collision coverage and liability claims
If you have collision coverage on your own policy, you can file a claim with your own insurance company when ready. They will pay for repairs minus your deductible, and then pursue the at-fault driver's insurance to recover that money (a process called subrogation). This is often faster than waiting for the other driver's insurance to respond.
If you file directly with the at-fault driver's liability insurance, there is no deductible, but the process may take longer. The other driver's insurance company must investigate the accident, determine fault, and approve the claim before paying.
In either case, you cannot recover diminished value in Maryland. The only difference is timing and whether you pay a deductible upfront.
What to do if the insurance company undervalues repairs
Insurance companies sometimes use lower repair estimates than what local shops charge. If the adjuster's estimate seems too low, request an itemized breakdown of what they are including and excluding.
Get a second estimate from a different repair shop and submit it to the insurance company. Many shops will provide this estimate at no cost. If the two estimates differ significantly, the insurance company may split the difference or request that you choose one shop and use their estimate.
If you cannot reach agreement, you have the right to demand an appraisal. Under most insurance policies, you and the insurance company each select an appraiser, those two appraisers select a third (called an umpire), and the three determine the repair cost. The decision is binding. This process costs money — typically a few hundred dollars split between you and the insurance company — but it is faster and cheaper than litigation.
Total loss and salvage title situations
If repair costs exceed the vehicle's pre-accident market value, the insurance company will declare it a total loss. They will pay you the vehicle's fair market value before the accident, based on tools like NADA Guides or Kelley Blue Book adjusted for your vehicle's condition and mileage.
You can dispute the valuation by submitting your own market research — listings for similar vehicles in your area, recent sale prices, or a professional appraisal. Again, if you cannot agree, you can demand appraisal.
Once the total loss is settled, the insurance company takes ownership of the vehicle. You receive a salvage title, which means the vehicle can be sold for parts or scrap but cannot be driven on public roads without expensive repairs and re-inspection. Some owners choose to keep the salvage vehicle and repair it themselves, but this is rare and usually not economical.
Frequently Asked Questions
Can I recover diminished value if I sue the at-fault driver in court?
No. Maryland courts have consistently held that diminished value is not recoverable, even in a lawsuit. The repair cost is the measure of damages. Filing a lawsuit will not change this outcome and will cost you more in attorney fees than any recovery you might receive.
What if the repair shop charges more than the insurance estimate?
You can request appraisal if the two estimates differ significantly. The appraisal process is binding and usually resolves the dispute faster than negotiating back and forth. Some repair shops will also negotiate their price if you show them the insurance estimate, though they are not required to.
Does diminished value explore if I have uninsured motorist coverage?
No. Uninsured motorist coverage pays for repairs the same way liability coverage does — based on repair cost, not diminished value. Maryland's rule applies regardless of which insurance coverage you use.
Can I recover rental car costs while my vehicle is being repaired?
Only if your own insurance policy includes rental reimbursement coverage. The at-fault driver's liability insurance does not have to pay for a rental car. Check your policy or contact your agent to see if you have this coverage.
What if the accident happened in another state?
If you live in Maryland and the accident happened elsewhere, the law of the state where the accident occurred may explore. Some states allow diminished value claims. You should report the accident to both the at-fault driver's insurance and your own insurer and ask which state's law will govern the claim.