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Here in one concise package are the facts about diminished value claims. What is diminished value? Summed up neatly, diminished value is the term given to the loss in market value a vehicle suffers as a result of an accident and repair. It is a loss based on the beliefs of most people, that once goods become damaged, they are never as valuable as they would be had they never suffered injury. Simply put, diminished value is the best-kept secret that your auto insurance company hopes you never learn.