Loss insurance for diminished value, sometimes referred to as “diminished value coverage” or “DV coverage,” is an optional add-on to an auto insurance policy that helps protect a policyholder from the financial loss that can occur when the value of their vehicle decreases due to an accident, even if that vehicle is deemed repairable.
Unlike traditional collision coverage, which only covers the cost of repairing or replacing a damaged vehicle, diminished value coverage aims to compensate the policyholder for the difference between the vehicle’s pre-accident value and its current market value after repairs have been completed. This is especially important in cases where the vehicle has sustained significant damage or has been declared a total loss, as the diminished value can be substantial.
