In every claim I have ever handled where the vehicle was a total loss and had a salvage / rebuilt title, I was instructed to deduct 50% of it’s pre-accident value to account for the salvage / rebuilt status. Also, when I was handling claims for insurance companies, I was routinely told that diminished value did not exist and to simply deny paying for it.
If asked, the main reason for denial was because it was a “stigma” claim, for which we did not legally owe (which was a lie). The next best denial reason was that unless the vehicle sold for a loss due to the repair history, the claim was “unrealized” and there was no claim (also a lie).