Diminished value claims in Michigan

Who can claim diminished value in Michigan

• Against an insured at-fault driver in Michigan: tort liability for vehicle damage is abolished except for the mini-tort under MCL 500.3135(3)(e). The mini-tort covers damage to your vehicle, up to $3,000 for crashes after July 1, 2020, to the extent the damage is not covered by insurance. Whether lost market value can be counted inside that cap is not addressed by the statute.
• Against an at-fault vehicle without required Michigan coverage: the abolition in MCL 500.3135(3) applies only to vehicles for which the required security was in effect. If the at-fault vehicle had none, an ordinary property-damage claim, including lost value, remains available against the owner or driver personally, though collecting may be hard.
• Under your own policy: vehicle damage in a moving-vehicle crash is normally handled under your own collision coverage, which pays to repair or pays actual cash value. A separate diminished-value payment is generally not part of that promise.
• If your car was properly parked when hit, property protection insurance (PPI) may apply. MCL 500.3121 pays the lesser of reasonable repair cost or replacement cost less depreciation, plus loss of use. The statute does not list lost market value.

Michigan deadline: 3 years (MCL 600.5805(2))

Three years after the injury to file an action for injury to property, which includes a mini-tort suit. Mini-tort claims are usually small and quick, so most people file well inside that window, but the outer limit is three years.

Fault: MCL 500.3135(4)

For the mini-tort, damages are assessed on comparative fault, and nothing is awarded to a party who is more than 50% at fault. No mini-tort damages are allowed if your own car was being driven without the required coverage.

How Michigan law treats diminished value

Michigan is the clearest exception to the usual diminished-value playbook. In most states, lost value is simply part of the property-damage claim against the at-fault driver. In Michigan, MCL 500.3135(3) abolishes tort liability arising from the use of an insured motor vehicle within the state, with a short list of exceptions, and the only one that reaches ordinary vehicle damage is the mini-tort.

The mini-tort is capped at $3,000 for crashes after July 1, 2020 (it was $1,000 before), and it applies only to vehicle damage not covered by insurance. Many drivers use it to recover a collision deductible or, if they carry no collision coverage, part of the repair bill. Any lost-value argument has to fit inside the same cap.

The statute also says how a mini-tort must be handled: it is not part of the residual liability that insurance must cover, it must be filed in the small claims division of the district court or a municipal court whenever legally possible, and a party who removes it to a higher court and loses may be charged costs. The claim is against the at-fault driver, so send the demand to the driver and ask whether their insurer will handle it.

A full diminished-value claim in the ordinary sense is mainly realistic in Michigan when the abolition does not apply, such as when the at-fault vehicle lacked the required coverage. The abolition also covers only the use of a vehicle within Michigan, so for a crash in another state, check that state's rules before assuming the mini-tort cap applies.

How insurers value a totaled car in Michigan

Michigan total losses are usually handled under your own collision or comprehensive coverage, and insurers generally value them with a vendor report built from comparable vehicles. Ask for the full report and check each comparable's trim, options, mileage, title status and location, and whether condition deductions were applied only to your car.

Michigan's title law sets thresholds that shape these decisions. Under MCL 257.217c, when an insurer takes ownership of a late model vehicle through a claim and the estimated repair cost is at least 75% but less than 91% of the vehicle's pre-damage actual cash value, it must obtain a salvage title, and at 91% or more, a scrap title. The same thresholds apply if the insurer lets you keep the car after a total-loss payment.

Complaints about claim handling go to the Michigan Department of Insurance and Financial Services (DIFS).

The appraisal clause in Michigan

Most Michigan auto policies include an appraisal clause for disputes over the amount of a covered physical-damage loss, which in Michigan usually means a collision or comprehensive claim on your own policy. Each side picks an appraiser, an umpire settles disagreements, and the outcome sets the amount, not coverage.

Because most Michigan vehicle damage is paid by your own insurer rather than the other driver's, the appraisal clause matters more here than in most states. It is the main tool for a disputed total-loss value or repair amount.

What else matters in Michigan

• Michigan district court small claims divisions hear cases up to $7,000 for claims filed since January 1, 2024 (MCL 600.8401), which comfortably covers the $3,000 mini-tort.
• Under MCL 500.3135(4)(d), a mini-tort decision is not binding in any other proceeding about the same crash, so a small claims result does not decide fault for injury claims or for your insurer's records.
• Michigan's collision options and deductibles drive how much is left for a mini-tort. Check your declarations page before a crash, since the uncovered portion is what the mini-tort can reach.