USAA does pay diminished value in certain situations. If a USAA member caused your accident and USAA agrees its member was at fault, you can request payment for the value your vehicle lost. When your own car is covered by USAA and the claim goes through your own policy, lost value is generally not included.
Diminished value means the drop in a car's worth following an accident, even after full repairs are done. Buyers tend to offer less for a vehicle with a crash on its record, and that difference is your loss.
USAA Members and Other Drivers
Most people join USAA through a military connection. USAA's home page names active duty service members, National Guard and Reserve members, veterans who served honorably, military spouses and children of USAA members.
This matters even when you could never become a member yourself. The person who hit you might belong to USAA, and you would file against their policy. USAA says non-members are able to file claims through USAA.
Diminished Value Claims When a USAA Member Causes the Crash
When you file against the other driver's insurer, insurers call that a third-party claim. USAA's third-party claims page explains that payment is based on who bears responsibility for the accident. It also reviews what the member's policy includes before paying anything.
Once USAA accepts liability, it states it will pay the costs of repairing or replacing your vehicle. Liability here refers to legal responsibility for the damage caused. The page says nothing about value lost following repairs. That is why it makes sense to request lost value as a separate line item instead of assuming it will come with the repair check.
USAA explains that its fault decision rests on the facts of the accident, the applicable laws and the member's policy limits. A report for the Connecticut General Assembly concluded that most courts permit diminished value claims against the driver who was at fault.
How Much Value Can a Car Lose?
How much is lost depends largely on the severity of the damage. Common market ranges, as a share of what the car was worth right before the accident, are:
| Type of damage | Typical share of value lost |
|---|---|
| Severe frame or structural damage | 15% to 30% |
| Major frame damage plus many panels | 10% to 20% |
| Moderate frame damage and several panels | 5% to 12% |
| Minor frame damage and a few panels | 3% to 8% |
| Only panels or bumpers, with no structural harm | 2% to 5% |
For example, picture a vehicle valued at $25,000 just before the accident that has moderate frame damage and several affected panels. It falls in a typical market range of $1,250 to $3,000.
How to Make a Diminished Value Claim With USAA
USAA's third-party page spells out what you need to open a claim. Preparing your lost value paperwork at the same time keeps everything together in one request.
- Open the claim with USAA, giving the member's name and policy number, when the crash happened and the makes of both vehicles, along with the police report if one exists.
- Request diminished value in writing as its own item, since the repair payment only covers fixing the car, not the value it lost.
- Send copies of the repair estimate and final invoice, photos showing the harm, a vehicle history report, and an appraisal of the value that was lost, and keep the originals.
- Write the claim number on each page and request a written response, so there is a paper trail of what went out and when.
Will USAA Cover Lost Value on a Member's Own Policy?
In most cases, no. When you claim on your own policy, that is a first-party claim. The Connecticut report notes that first-party coverage usually does not include lost value.
Georgia is one state where the rule works differently. According to a Liberty Mutual notice, Georgia's insurance commissioner directed all insurers to look for diminished value whenever a customer files a claim.
The Class Action Against USAA in Washington
In a class action, a few people sue for a whole group that shares the same problem. A Law360 story from August 21, 2014 says USAA transferred a Washington diminished value class action into federal court. The article does not report the outcome, so the matter remains an allegation, not a court ruling.
That case came after an earlier Washington Supreme Court decision. In Moeller, a ruling from December 22, 2011, the court let the driver recover lost value under the policy wording in that case. That decision involved Farmers, not USAA.
If a Claim Stalls
If USAA stays silent or rejects your request without a clear explanation, you can complain to your state department of insurance. Attaching your letters, the claim number and USAA's responses makes it easier for the state to look into your complaint.