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Diminution Insurance

Our Diminution Insurance product applies where a motor vehicle suffers damage and despite its subsequent repair, incurs a drop in its value.

What is diminution?

Diminution is the loss in value of a motor vehicle in the marketplace after it has been involved in a road traffic accident.

The loss arises due to the fact that a vehicle inherits an accident history and applies even where repairs have been carried out to a high standard.

The diminution in value occurs immediately after the accident damage has occurred. From that date the motor car has a diminished value which remains with it for the rest of its existence.

Damages for diminution in value of the vehicle are calculated based on how much the vehicle is worth immediately after it has been repaired compared to how much the vehicle was worth if it hadn’t been involved in an accident.

Diminution Stats

*Source: SMMT Statistics, estimated value

** Source: Clifford James Consultants

Diminution Insurance

Our Diminution Insurance product applies where a motor vehicle suffers damage and despite its subsequent repair, incurs a drop in its value.

The policy is designed to compensate the policyholder for this loss in value and covers the monetary difference between a vehicle’s pre-accident value and the post-repair value.

The scale of loss is determined by a range of factors such as the age of the vehicle and the type and extent of damage sustained. Typically, diminution claims are in the range of 5-15% of pre-accident value.

The policy is underwritten by an A-rated insurer and benefits from the specialist claims handling expertise of our solicitors firm, Clifford James Consultants Limited, which has over 16 years’ experience handling diminution claims and is widely regarded as the market leading provider of Diminution Services in the UK market.


The Market

Diminution insurance targets vehicles up to 3 years old and those with a value up to £150,000.

SMMT statistics show there have been 7 million new vehicles registered in the UK in the last 3 years.

Based on our experience in Diminution claims, Clifford James estimate that there are currently in the region of £130 million of uninsured diminution losses in the UK market.

The product is sold standalone or as part of a suite of other insurance products such as GAP, tyre insurance and breakdown cover.

Insurance companies usually exclude diminished value claims from their policies.

How does Diminution insurance fit in with GAP insurance?

The two insurances are extremely complementary to each other.

GAP insurance responds when there has been a total loss to an insured vehicle. 

Diminution Insurance responds when the vehicle has not been written off but has sustained serious damage and despite its subsequent repair, its resale value is permanently affected by virtue of its accident history.

Is Diminution Insurance applicable to vehicles leased or financed?


We recommend it to cover the potential liability to the finance company in the event the vehicle suffers a diminution in value during the lease or hire period. Most contracts will include liability for a fall in value when returning the vehicle.

How is the Diminution loss assessed?

The policy covers the monetary difference between the vehicle’s Pre-Accident Value and its Post-Repair Value. 

Pre-Accident Value is determined by reference to a motor industry valuation guide such as Glasses Guide.

Post-Repair Value will be assessed following the vehicle’s satisfactory repair and our evaluation of the damage report. Where required an expert engineer may be appointed to carry out an inspection and make an independent assessment of its loss in value.  

Will a diminution loss arise in every accident?

No. Minor or cosmetic damage can be easily repairable and will not affect the vehicle’s resale value.

To cause a diminution in value the vehicle needs to have suffered serious or significant damage that despite its repair will still impact its resale value.

What happens if the vehicle is not repaired?

Policy coverage requires the repair of the damaged vehicle and we are unable to determine a diminution loss until it has been repaired satisfactorily.

Is Diminution covered under a comprehensive motor insurance?

No. Insurance companies usually exclude this type of claim from their motor policies, even where cover is fully comprehensive.

Can a Diminution loss be recovered by any other means?

In certain circumstances, yes. In the case of a non-fault accident a recovery can be made against the at-fault party or their insurers. 

Clifford James have specialised in making these recoveries since 2006. However, the associated legal costs in making a recovery in this way will inevitably erode the amount of compensation ultimately received by the vehicle owner. Diminution Insurance has been designed to ensure the policyholder receives the full amount of the financial loss to the vehicle’s value, whether they are at fault or not for the damage.

Apply for diminution insurance now by filling in the form below

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