What is Diminished Value?
Diminished value is the loss in market value that occurs when a vehicle is damaged and repaired. You may be entitled to receive compensation for this loss in value. In order to determine Diminished Value you need to get a comprehensive auto appraisal.
Were did it come from?
It was created by the insurance industry in an effort to justify a cash cow in the rental car industry. That cash cow is called a damage waiver. In order to justify the daily damage rates that exceed the previous maximum allowable insurance they justified it by the adding the Diminished Value to each damge claim on a rental vehicle.
This turned out to be a double edge sword, by conceding what the insurance companies deny to their own insurance carriers. If Diminished Value exists on rental cars, it exists with your own damage claim.