What Is A Deminished Value Claim? All You Need To Know (2023)

Cars lose their value over time through depreciation, which is caused by factors like normal wear and tear, mileage, and age. However, getting into an accident can cause your vehicle to depreciate more quickly, especially if there’s extensive damage.

If you get into an accident, your car will have a diminished value. It represents the difference between your car’s value before an accident and its value after an accident once the repairs have been made.

Filing a diminished value claim can help you recoup some of the money you would lose by selling a car that’s been in an accident.

Understanding diminished value claims

There are three different types of diminished value claims: immediate, inherent, and repair-related. Here’s what you need to know about each one.


With an immediate diminished value claim, you’re asking to be compensated for your vehicle’s loss in value immediately after an accident, and before the car is repaired. This type of claim is uncommon. You’ll typically only see immediate value claims in court.


After an accident, your car will lose value, even if the accident was minor. If you file an inherent diminished value claim, you’re essentially asking the insurer to pay you the difference between the car’s value after the accident and repairs, and what it would have sold for prior to the accident.


A repair-related diminished value claim occurs when your vehicle is repaired after an accident, but the repairs were not done properly, or the quality of work was poor. Because faulty parts and incomplete repairs can cause your car’s value to drop even further, this type of claim allows you to seek compensation for the additional loss in value.

(Video) How Diminished Value Is Calculated

How to calculate diminished value

Most insurance companies use a formula called 17c to calculate diminished value. The process of calculating diminished value is somewhat complicated, but you can figure it out yourself by doing some research.

Find your car’s value

To start, you will need to determine your car’s fair market value. Sites like NADA, Kelley Blue Book (KBB) and Edmunds have free online tools for this. Be prepared with information about your car, like the VIN, mileage, and trim level, which is used to estimate the value.

Multiply your car’s value by 10%

The next step is to multiply your car’s market value by 10%. This 10% addition is known as the base loss of value, which is often the highest amount of money your insurance provider will give you after a covered claim.

However, the base loss of value may be less than the actual lost value of your vehicle. In some states, like Georgia, insurance companies are required to prove that their calculations for base loss of value are appropriate. If the amount you would get from the 17c calculation is significantly lower than the cost of your damages, you may want to speak with an attorney about the laws in your state.

Find the adjusted value

To find the adjusted value of your vehicle, you need to identify the damage multiplier which correlates to the amount of damage your car sustained in the accident. Once you find the correct damage multiplier, you need to multiply that number by the base loss of value.

The damage multipliers are below:

(Video) Diminished Value and Loss of Use EXPLAINED

Type of DamageDamage Multiplier

Type of Damage

Severe structural damage

Damage Multiplier


Type of Damage

Major structural/panel damage

Damage Multiplier


Type of Damage

Moderate structural/panel damage

Damage Multiplier


Type of Damage

Minor structural/panel damage

Damage Multiplier


Type of Damage

No structural damage

Damage Multiplier


Apply the mileage multiplier

Mileage is one of the factors that impacts your car’s value. To complete the 17c formula, you must find the mileage multiplier for your vehicle and multiply that number by the adjusted value.

Mileage RangeMileage Multiplier

Mileage Range

Under 19,999 miles

Mileage Multiplier


Mileage Range

20,000 - 39,999 miles

Mileage Multiplier


Mileage Range

40,000 - 59,999 miles

Mileage Multiplier


Mileage Range

60,000 - 79,999 miles

Mileage Multiplier


Mileage Range

80,000 - 99,999 miles

Mileage Multiplier


Mileage Range

More than 100,000 miles

Mileage Multiplier


How to file a diminished value claim

Diminished value claims are different than regular car insurance claims, and it often requires some work on your end. Here’s a basic overview of how to file a diminished value claim.

Call the insurance company

If you have diminished value coverage through your insurance, you’ll want to contact your insurance company first. Your insurance can help you figure out whether you should file a claim with them or with the at-fault driver’s insurance company.

After you’ve determined the company, call and request to file a diminished value claim. An agent will walk you through the process and let you know what paperwork and documentation is required. Make sure your insurance company knows that you're starting this process.

Calculate your car’s diminished value

When you file a diminished value claim, you are typically responsible for calculating your car’s diminished value using the 17c formula. Be sure to use the correct damage multipliers and mileage multipliers and find the accurate value of your vehicle. Any mistakes could affect the outcome of the claim.

You can also hire an independent appraiser if you believe the 17c calculation will leave you with a significant financial loss.

Wait to hear from the insurer

The final step is to submit all the paperwork and wait for a response from the insurance company. If the adjuster needs additional information, like a vehicle appraisal, they will let you know.

(Video) STATE FARM Diminished Value Claim - How to Get PAID Fairly and Quickly!

When should you file a diminished value claim?

Although you usually have at least two years to file a diminished value claim, you’ll most likely want to file as soon as possible. That way, you’ll recoup the costs sooner, and it will be easier to provide evidence of the accident and damage to your car.

If you can’t file a diminished value claim right away, find out how much time your state gives you to file a claim.

How long does it take to settle a diminished value claim?

The amount of time it takes to settle a diminished value claim depends on many factors, including the insurance company’s process, the type of diminished value claim, and your state. You can expect the process to take at least a few weeks, but it’s possible that the insurance company will need more than a month to settle.

Is a diminished value claim worth it?

Filing a diminished value claim can be a good option for some drivers, but it depends on the situation. Additionally, every state has different laws around diminished value claims, and who can file them.

In general, filing a diminished value claim only makes sense if you were not responsible for the accident. If you caused the crash, it’s very unlikely that your insurer will approve a diminished value claim. You might also file this type of claim if you were hit by an uninsured driver.

Diminished value claims can also be beneficial if your vehicle has a very high value with low mileage or is nearly brand-new. You might be able to recoup a larger amount of money if your claim is approved.

If your car is older or was already in poor condition, it might not be worth it to file the claim.

(Video) How to Prove Diminished Value After Your Car Accident

Frequently asked questions (FAQs)

Is diminished value negotiable?

Diminished value can be negotiated. Some insurance companies might be willing to negotiate the final diminished value claim payout, but it all depends on the specific insurer and the details of the claim. It’s easier to negotiate if you have an independent appraisal backing up your claim.

How much value does a car lose after an accident?

All cars lose value after an accident, but the actual loss of value varies based on the severity of the damage, the age of the vehicle, and the type of vehicle. However, some estimates show that the resale value of a car that’s been in an accident drops by about $500.

What is a good settlement offer for a car accident?

A good settlement offer for a car accident should cover any costs incurred due to the accident, including medical bills, loss of work or employment, and vehicle damage. If you can, speak to a lawyer before accepting a settlement offer.

Is diminished value the same as depreciation?

Diminished value and depreciation are two different things. Diminished value is the difference between your car’s market value before an accident and its value after an accident once repaired. Depreciation is your vehicle’s loss in value over time, which is caused by normal wear and tear. Your car’s depreciation is determined based on its mileage, age, make, mode, and general condition.

Can a claim affect the value of a car?

A diminished value claim won’t affect the value of your car. However, if your vehicle is damaged, its value will drop even if it’s fully repaired.

The information presented here is created independently from the TIME editorial staff. To learn more, see our About page.


What Is A Deminished Value Claim? All You Need To Know? ›

In North Carolina, diminished value claims are calculated by comparing the difference between the fair market value (FMV) of your vehicle before your accident occurred and the depreciated value of your vehicle following the accident and the repair of your vehicle.

How do you explain diminished value? ›

Diminished value explained

Even if the car repairs meet the highest quality standards, potential buyers are unwilling to pay as much for a car they know has been previously damaged. This difference between what the pre-accident car was worth and the market value of the post-repair car is known as diminished value.

What is the best way to calculate diminished value? ›

Example of a diminished value calculation

Say the NADA value for your vehicle is $20,000. Calculate the base loss of value by using a 10% cap. Simply multiply $20,000 by 10%. The result is $2,000, which represents the highest amount a car insurer will pay for a diminished value claim under formula 17c.

How do I write a diminished value claim letter? ›

I hereby request reimbursement for my vehicle's diminished value in the amount of $[amount of DV + cost of appraisal] (this amount includes $[cost of appraisal) for the cost of an appraisal as it is an additional indirect loss). I am reasonable and want nothing more than to be indemnified for my loss.

What are the three broad categories of diminished or diminution of value? ›

There are three types of diminished value claims: Inherent diminished value, repair-related diminished value, and immediate diminished value. Most insurance companies use a special formula to determine what to pay for your car's reduced value after an accident.

What are the notes of a diminished? ›

Diminished chords are triads that include a root, a minor third, and a flat fifth (also called a diminished fifth). Their first two notes are the same as those in a minor triad—the difference is the fifth. In a minor chord, the fifth is natural, which means it is a perfect fifth above the root pitch.

How do you know if a note is diminished? ›

A diminished chord is a type of chord that contains a minor 3rd (three half steps above the root) coupled with a diminished 5th (six half steps above the root). It has a distinctive timbre: tense, dark, and unstable sounding.

How do you calculate totaled car value? ›

Actual cash value (ACV)

ACV is used to determine how much of a payout you will receive for a totaled vehicle. It is determined by the replacement cost of your vehicle minus depreciation, which considers things like age and wear and tear.

What is to diminish in value over time? ›

Definition: The monetary value of an asset decreases over time due to use, wear and tear or obsolescence. This decrease is measured as depreciation. Description: Depreciation, i.e. a decrease in an asset's value, may be caused by a number of other factors as well such as unfavorable market conditions, etc.

What is structural damage on a car? ›

A vehicle will suffer structural damage when the energy of the collision is severe, causing the structure to absorb the energy and deform to protect the vehicle's occupants. The vehicle will no longer properly drive down the road, causing the suspension, steering, and tires to wear prematurely.

Can you write off diminished value on taxes? ›

A diminished value appraisal can assist you in determining the amount of loss you can claim as an itemized tax deduction on Form 4684 on your Federal tax return. In many cases, the cost of the car appraisal can also be claimed as an itemized deduction.

What is an example of a demand letter for insurance settlement? ›

Dear Ms. Claim Adjuster: This settlement demand package is submitted, on behalf of our client, Megan Barbero. Based upon the clear liability and the injuries and damages sustained, I will counsel Megan that she should settle her claims against your insured for a $100,000.00 payout.

What is an example of a pain and suffering demand letter? ›

Your insured's negligence has forever changed my life and they are a direct cause of my injuries, pain and suffering. I hereby make demand of $565,759.60 for my injuries, loss, pain and suffering which were in direct correlation with the accident your insured has caused.

What is an example of diminution of value? ›

For example, if a car is worth $40,000 before a collision and only $25,000 after being damaged, its gross diminution in value is $15,000. If after repairs of $10,000, the car is worth $30,000, the residual diminution in value is $10,000.

What is an example of a decrease in value measure of damages? ›

For example, if you enter into a contract with a developer to build a home for $1,000,000 and the developer builds a home worth $700,000, the damages calculated using diminution in value would be $300,000.

What is diminution of business value? ›

Diminution of business value applies when a business has been destroyed, either physically or functionally. The measurement of economic loss is typically the value of the business. This diminution of value can be a 100% loss or some percentage of what was irreparably harmed.

What is the formula for the diminished scale? ›

The diminished scale is a symmetric scale formed by the sequence: Tone – Semitone – Tone – Semitone – Tone – Semitone – Tone.

What are the 4 diminished chords? ›

They are: C°, C#° and D°. The remaining diminished chords are a consequence of these 3 chords: C° = D#° = F#° = A° C#° = E° = G° = A#°

How many notes are in a diminished scale? ›

The diminished scale is an eight-note scale with a symmetrical construction of alternating whole tones and semitones. The diminished scale is also commonly called the octatonic scale since it has eight tones.

How do you know if you are augmented or diminished? ›

Augmented intervals are one half step larger than perfect or major intervals and diminished intervals are one half step smaller than perfect or minor intervals.

How do you tell if something is augmented or diminished? ›

Augmented intervals are one half step larger than a perfect or major interval. Diminished intervals are one half step smaller than a perfect or minor interval.

How to tell the difference between diminished and half diminished? ›

Difference. The difference between a diminished chord and a half diminished chord lies in the seventh. The half diminished chord (m7b5) has a minor seventh (7) - it's a m7 chord wth a flat five (b5). The diminished chord has a diminished seventh (dim7, °7).

How to negotiate a totaled car value? ›

If you are wondering how to negotiate with car insurance adjusters about car total loss value, here are five helpful tips for negotiating a better settlement.
  1. Gather All Evidence and Documentation. ...
  2. Prepare a Thorough Counteroffer. ...
  3. Look for Comparable Values in Your Area. ...
  4. Get the Insurance Company's Offer in Writing.
Mar 24, 2023

At what percentage is a car totaled? ›

Insurance companies often use a percentage to determine whether the car is totaled. Most totaled cars have damage between 70 and 75 percent of the value. For example, if your vehicle is worth $10,000 and the cost to repair it is $7,000, the insurance company will likely total it.

Is my car totaled if the airbags deploy? ›

Many people believe, and have likely been told, that if the airbags go off after a crash, the vehicle is automatically considered a total loss. This is not true. While a crash that is severe enough to set off the airbags will usually cause enough damage to total the car, it doesn't always.

What doesn't lose value over time? ›

You can't depreciate assets that don't lose their value over time – or that you're not currently making use of to produce income. These include: Land. Collectibles like art, coins, or memorabilia.

What gets value over time? ›

Some examples include investments in the stock market, bonds, and property. All these investments have an inherent risk associated with them because there is always a chance you will lose money on them if things don't work. That said, the rich tend to buy appreciating assets and hold them for long periods of time.

What causes the value of money to decline? ›

On the one hand, devaluation happens when a government makes monetary policy to reduce a currency's value; on the other hand, depreciation happens as a result of supply and demand in a free foreign exchange market. Devaluation is a decision that makes a currency lose value.

Is a car totaled if the frame is bent? ›

No, a car is not automatically totaled if the frame is bent because whether a car is totaled depends on the actual cost to repair the vehicle compared to how much the vehicle was worth.

What is considered extensive damage to a car? ›

In general, severe damage includes: Broken/bent frames. Broken/bent axels. Missing pieces of the vehicle.

Does frame damage affect car value? ›

Modern cars use unibody construction, with the frame and body skeleton manufactured as a single structure. Depending on the severity of the damage, frame damage is repairable. Insurance companies will usually declare the car a total loss if repairing the frame damage on a vehicle costs more than its value.

How do you calculate diminishing value depreciation? ›

Basically, you take the number 200 and divide it by the item's effective life. For example, 10 years, and express that as a percentage (200/10 = 20% in this example). The depreciation rate applies to the diminished value of the asset after it has been depreciated each year.

Is it better to write off or depreciate? ›

It's generally better to expense an item rather than depreciate it because money has a time value. You get the deduction in the current tax year when you expense it. You can use the money that the expense deduction has freed from taxes in the current year.

Can you write off car damage on taxes? ›

You can deduct the physical and property damage caused by an accident on your federal taxes using Form 4686 and Schedule A of Form 1040. covers. Naturally, if you end up having to spend money due to a car accident, you'll undoubtedly want to get some of it back.

How do you write a strong demand letter? ›

Frequently Asked Questions (FAQ)
  1. Type your letter. ...
  2. Concisely review the main facts. ...
  3. Be polite. ...
  4. Write with your goal in mind. ...
  5. Ask for exactly what you want. ...
  6. Set a deadline. ...
  7. End the letter by stating you will promptly pursue legal remedies if the other party does not meet your demand.
  8. Make and keep copies.

What is a legal letter of demand response? ›

A response to demand letter is a formal written reply to a demand for payment. Though this response may be enough to repel the quest for payment, it may also enter as evidence in a court case if things aren't resolved – so the letter should provide a clear and detailed explanation.

What is written in the demand letter? ›

Date and the recipient's contact information. Legal phrase WITHOUT PREJUDICE to protect you from the contents of the letter being used against you later in court. Summary of the agreement and the problem or issue.

How do you prove emotional pain and suffering? ›

To prove emotional distress, you'll need to be able to prove:
  1. The defendant had a duty to behave reasonably and to not behave outrageously or in an extreme manner likely to cause distress.
  2. The defendant breached that duty by intentionally or recklessly behaving outrageously.
Sep 22, 2022

What is evidence of pain and suffering? ›

Some documents your lawyer may use to prove that your pain and suffering exist include: Medical bills. Medical records, including your treatment records. Pictures of your injuries. Psychiatric records.

What is the diminution value? ›

Diminution in value is a legal term of art used when calculating damages in a legal dispute, and describes a measure of value lost due to a circumstance or set of circumstances that caused the loss.

What is property diminution in value? ›

Diminution in value (property) is a measure of the loss of use of property that has not been physically injured but that is less marketable because of the presence in it of a known defect.

What are the four 4 broad categories of damages? ›

Today, we're looking into four types of damages you may be able to receive in a breach of contract case.
  • Compensatory damages. ...
  • Punitive damages. ...
  • Nominal damages. ...
  • Liquidated damages.
Sep 20, 2022

What are three types of loss that give rise to compensatory damages? ›

COMPENSATORY. Compensatory damages are generally the most identifiable and concrete type of damages. These include amounts for lost income, property damages, and medical care resulting from the Defendant's misconduct.

How do you get rid of business losses? ›

No one goes into business to lose money. Check out these five tips to help improve profitability.
  1. Get organised. Time is money, and there's no bigger drain on your time than being disorganised. ...
  2. Provide amazing customer service. ...
  3. Implement effective marketing. ...
  4. Invest in your staff. ...
  5. Get the price right.
Jan 18, 2022

How do you value a business off of income? ›

In the income approach of business valuation, a business is valued at the present value of its future earnings or cash flows. These cash flows or future earnings are determined by projecting the earnings of the business and then adjusting them for changes in growth rates, taxes, cost structure, and others.

What is diminution in value lost profits? ›

What is a diminution in value indemnification? Stated simply, a diminution in value indemnification is an indemnification that measures an investor's loss based upon the amount by which the value of its investment decreases as a result of the indemnifiable event.

What is the diminished scale formula? ›

The formula is 1 - 9 - b3 - 11 - b5 - #5 - 13 - 7. The half-whole diminished scale (the diminished scale) known as "dominant diminished scale" is constructed by repeating a pattern of half and whole steps. It is generally played over dominant 7 chords (7b9).

Does diminished resolve up or down? ›

I To resolve a diminished 7th chord, the leading tone (which is the root) must resolve up. The rest of the chord members resolve down.

What is a diminution of value in insurance? ›

Diminution in value (property) is a measure of the loss of use of property that has not been physically injured but that is less marketable because of the presence in it of a known defect.

What are the three types of diminished scales? ›

There are really only 3 diminished scales – C, C#, and D. When we build the scale starting on D# we get the same scale as the C diminished scale, as it is just an inversion of the C diminished scale.

What are the two types of diminished scales? ›

Diminished scales come in two varieties—”half-whole” and “whole-half.”

Is diminished a plus or minus? ›

Diminished is often (but not always) used in a negative way to imply that something has gotten worse.

What is a diminished whole half and half whole? ›

The Diminished Scale is a symmetrical scale and alternates between a semitone and a tone. It's known as a Half Whole when played over Dominant chords. Whole is referring to a Whole Tone and Half is half a Tone, which is better known as a semitone.

What does diminished resolve to? ›

As a borrowed vii7, diminished sevenths nearly always resolve to their tonic, which is a semitone above the root.

What scale degree is diminished? ›

Diminished triads naturally occur on the seventh scale degree of any major scale, or the second scale degree of any minor scale. For example, in the key of C major, if you build a triad using B as the root note, you'll naturally get a B diminished triad (consisting of the notes B–D–F).

Is diminished always minor? ›

Diminished chords are not a kind of minor chord. Yes, both the minor and diminished chords have a minor third, but they a considered different types of chords.

What is value recoverable after loss in insurance? ›

A recoverable depreciation clause in an insurance policy accounts for the deterioration in the value of insured possessions. If depreciation is recoverable in the policy, the owner may claim those costs as well as the cash value of the possessions that were destroyed or damaged.


1. Two Tips for Diminished Value Claims
(Car Crash Kit)
2. How to Win Your Diminished Value Claim
(Georgia Trial Attorneys)
3. Calculating Diminished Value - What You Need To Know About Formulas
(Collision Safety Consultants of Southeastern Louisiana)
4. Diminished Value Claim - How I got State Farm to Pay the Full Amount! (True Story)
(Kayak Fishing Addict)
5. What is a diminished value claim?
(Albers & Associates)
6. Diminished Value Claims - Recovering Insurance Money after a Car Accident
(Brett Bressler)
Top Articles
Latest Posts
Article information

Author: Rob Wisoky

Last Updated: 06/21/2023

Views: 6477

Rating: 4.8 / 5 (48 voted)

Reviews: 95% of readers found this page helpful

Author information

Name: Rob Wisoky

Birthday: 1994-09-30

Address: 5789 Michel Vista, West Domenic, OR 80464-9452

Phone: +97313824072371

Job: Education Orchestrator

Hobby: Lockpicking, Crocheting, Baton twirling, Video gaming, Jogging, Whittling, Model building

Introduction: My name is Rob Wisoky, I am a smiling, helpful, encouraging, zealous, energetic, faithful, fantastic person who loves writing and wants to share my knowledge and understanding with you.