Diminished Value is compensation for the loss of revenue someone incurs through the damage to their vehicle through no fault of their own. Simply put, if I have a $50,000 sports car that has been in a loss and I want to sell and someone else has one for sale that hasn’t been in an accident, I will have to lower my price to sell the vehicle even though it’s been fixed. Diminished value is assessed and applied when you are not at fault for the accident and takes place after the repairs are completed.