If you've ever filed an auto insurance claim, you've probably heard both terms. They sound similar, they're often used interchangeably, and insurance companies are rarely motivated to explain the distinction clearly. But they are not the same thing — and understanding the difference could mean recovering significantly more from your claim than you otherwise would.

If your vehicle was involved in an accident, you may have heard the term diminished value — but few people truly understand what it means, why it happens, or how to make sure they're fairly compensated for it. Here's what you need to know.