Diminished Value

Diminished Value Claims, Explained

After a collision, your vehicle’s market value diminishes, regardless of whether the repair restored your car to its previous quality. An accident will almost always affect the amount for which the vehicle can be resold.

How to File a Claim What a Claim Is Worth

Published by Assurity Certified Solutions · Sources reviewed September 18, 2026

Quick Answer

What a Diminished Value Claim Is

A diminished value claim is a request to the at-fault driver’s insurer for the resale value your car lost by having an accident on its record. It’s separate from the repair bill. You can file one when the crash wasn’t your fault, and the amount depends on how you prove the loss, not just the insurer’s formula.

Many drivers never realize they could be paid for this decrease in value when they weren’t at fault in a collision. In this guide, you’ll learn about the different types of diminished value, when you can and can’t file a claim, and how to take this process one step at a time.

Three Kinds of Loss

What Are the Different Types of Diminished Value?

Unfortunately, vehicles almost always lose some value when they’re involved in an accident. Even if the car is repaired exactly to its original standards, it will sell for less money than the exact same car that has no collision history.

There are three primary kinds of diminished value once a vehicle has been in a collision.

Inherent diminished value

A vehicle inherently loses value regardless of the quality of the repair. Even if your car is fixed to its original specifications, using manufacturer-approved parts and equipment, its perceived value still decreases from its value before the collision. Dealers will sell it for less than the exact same vehicle with no accident history. There’s really no way to get around this change in value, and compensation for such a loss should be considered from the at-fault driver’s insurance provider.

Repair-related diminished value

If the work done in your collision repair job is shoddy or your vehicle clearly isn’t working like it did before, you may be able to claim additional compensation. A vehicle already loses value just by being in a collision, but if it’s not repaired correctly, it loses even more.

In some states and situations, you might even be able to claim even more if the insurance provider insisted you use aftermarket parts, which don’t always restore the vehicle to its original quality.

Immediate diminished value

Immediate diminished value is the least common situation you’ll run into. It measures the vehicle’s value right before an accident versus right after the accident, before any repairs. This amount is typically calculated when you decide to trade in your car rather than repairing it, which often occurs when the car is totaled or considered a complete loss.

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The 17c Formula

How Much Is My Diminished Value Claim Worth?

There’s some back and forth in the collision repair and insurance industries about the value of a claim. Insurers want to keep their costs low, so they universally use a formula that was implemented for one specific court case. This is known as the 17c formula, from paragraph 17, section C of the Georgia Mabry v. State Farm lawsuit in 2001. State Farm developed it for this specific case, but it is not a federal or state law, nor is it an industry-required standard.

Worked Example

How Do Insurance Providers Use the 17c Formula?

Typically, insurance providers use the following scales to determine how much to pay in a diminished value claim. We’ll calculate an example so you can see how this might work with a specific vehicle.

Step 1

Determine the vehicle’s value immediately before the collision.

Say you have a 2019 Honda CRV with 75,000 miles on it. You do some research on sites like Kelley Blue Book and look at comparable vehicles in your area, and the value you come up with is $22,000.

Step 2

Calculate 10 percent of the vehicle’s original value.

Insurers take 10 percent of that initial value calculation. In the case of your CRV, that number would be $2,200.

Step 3

Apply a damage multiplier.

Insurance companies typically use the following table to calculate the structural damage done to the vehicle. They’ll multiply the corresponding number based on damages done to the existing number.

  • 1.00Severe structural damage
  • 0.75Major damage to structure and panels
  • 0.50Moderate damage to structure and panels
  • 0.25Minor damage to structure and panels
  • 0.00No structural damage or replaced panels

Let’s say your car was hit head-on and you have moderate damage to the frame and the front panels. The insurer would multiply $2,200 by 0.5 and get $1,100.

Step 4

Apply a mileage multiplier.

Finally, the insurance provider will multiply a percentage by the previous number, based on the vehicle’s current mileage:

  • 1.00Under 20,000 miles
  • 0.8020,000 to 39,999 miles
  • 0.6040,000 to 59,999 miles
  • 0.4060,000 to 79,999 miles
  • 0.2080,000 to 99,999 miles
  • 0.00100,000+ miles

Your CRV has 75,000 miles on it, so the insurer multiplies $1,100 by 0.4, getting $440. This is about the number they’ll offer to you when you file the claim.

But is this really indicative of how much value your car lost? Let’s do some research again and say you look up the same CRV with a similar mileage, but with a collision history. You find vehicles for sale between $17,000-$18,000. The insurance provider may have offered you $440 back, but your car’s value actually decreased by about $4,500.

You can probably see the issues with the above formula:

  • Multiplying by zero will automatically result in a zero claim number.
  • Just because a vehicle doesn’t have structural damage doesn’t mean it didn’t lose value.
  • A high-quality vehicle with over 100,000 miles can still lose significant value after a collision.

And it doesn’t take much looking to see that the diminished value of a vehicle is a lot higher than the dollar amount you get from the 17c formula. This method of calculating diminished value payouts can leave a lot of drivers without good options.

Beyond 17c

Do I Have Any Other Options?

The 17c formula is just something that was adopted by the entire insurance industry, but it’s not a legal standard. If you research your vehicle’s value before and after the accident and believe you are owed a certain amount of money, you can certainly ask for more than the insurance provider is offering. However, the best approach is usually to hire an independent auto appraiser.

Independent appraisers inspect your vehicle, research its value before and after the collision, and develop a formal report that you can submit to the insurer. An independent appraiser is not associated with any insurance provider or dealerships, and ideally they have credentials from bodies like the American Society of Appraisers.

If you’re challenging an insurance provider’s assessment of your vehicle’s value, it will be most helpful to have the report from the appraiser as well as your own market value research. Documentation like repair estimates and photos of the collision damage is also good supporting evidence. While it’s not guaranteed that the insurer will respond favorably and give you more money, multiple drivers have successfully made claims based on a legitimate value assessment.

It’s important to know your rights as a driver after a collision and during the repair process. The insurer is responsible, as much as possible, for restoring you and your vehicle to your pre-loss condition. In some cases, that may include restoring the value you lost when the collision occurred.

Step by Step

How to File a Diminished Value Claim

If you’re a driver who was in a collision, take the following steps to file a diminished value claim for your vehicle.

Step 1

Determine who was at fault

While in some cases it may be obvious who was responsible for the collision, it's best to have solid evidence. Traffic cameras, dash cams, and police reports are the primary methods of determining who caused an accident.

Step 2

Compile a repair order

Next, you'll gather all the data from your repair: the initial repair estimate as well as the completed invoice with all the charges. Typically, you'll wait until all repairs have been completed to file a diminished value claim.

Step 3

Collect any additional information

Aside from the bill with the cost of your repair, you'll also want to have a vehicle history report or similar evidence from Kelley Blue Book, Edmunds, or other similar organizations. These demonstrate the initial value of the vehicle immediately before the collision.

Step 4

Get an independent appraisal

While you can certainly gather value data yourself, hiring an independent appraiser is often your best chance to receive a fair amount from your claim. Insurers tend to take an independent appraiser's report more seriously than a driver's own research, and it's the evidence you'd bring if the claim ends up in small claims court.

Step 5

Contact the at-fault driver's insurance provider

At this point, you'll send a letter to the other insurer, providing the official documentation from the appraisal and any other information you found on your own. Based on that data, you'll request a specific amount of money.

Step 6

Negotiate as needed

It's possible that the at-fault driver's insurer will counter with a different amount, often using the 17c formula to calculate a lower number. You don't have to accept this number; you can restate your case, citing the valid research you and the independent appraiser performed.

Step 7

Small claims court

In many diminished value claims, the insurer will recognize a reasonable dollar amount when you provide documented evidence. However, if a provider refuses to acknowledge the results of an appraisal in their offer, it may be worthwhile to take them to small claims court. Many insurers will go ahead and make a settlement once they receive a small court summons, but if they don't, you'll go to the hearing and present your evidence from findings like Kelley Blue Book and the results of the appraisal. You should also bring your documented conversations with the insurer up to that point.

The Exceptions

When You Can’t File a Diminished Value Claim

There are a few different situations in which you can’t file a diminished value claim with the at-fault driver’s insurance provider:

  • You were at fault. In most states and scenarios, drivers cannot file a diminished value claim for their vehicle when they caused the collision. There are some extremely rare exceptions, such as states that allow you to file a claim if you were only partially responsible for the collision, but this is very unlikely.
  • You live in Michigan. Michigan’s no-fault system doesn’t allow diminished value claims against the other driver. The mini tort lets you recover up to $3,000 in repair costs from the at-fault driver, but not lost value.
  • You leased the vehicle. If you’re leasing a car, the loss in value affects the leasing company, since they’re the owner of the vehicle and hold the title. Typically the leasing company will file the claim if the other driver was at fault.
  • Your car already had a very low market value. If your car is over 15 years old, has high mileage, or already has a collision history, it won’t lose a significant amount of value in an accident. Insurance companies may reject these claims altogether. You’ll likely see negligible changes in value when you conduct your initial research on your vehicle pre- and post-accident.
  • You missed the deadline. It varies from state to state, but there’s a specific window of time in which you may file a diminished value claim. In most states, the range is 2-5 years.

A couple other things to keep in mind: If you’re hit by an uninsured driver, you may be able to file a diminished value claim if you have uninsured motorist coverage under your own insurance. But this varies from state to state, so check your local laws and policy coverage before submitting a claim. And if you’re a driver in Georgia, your own insurer has to assess diminished value under your collision coverage, whether or not you were at fault. It’s the only state that requires this.

In all cases, check your specific state’s and insurance provider’s policies before submitting a claim so you know what to expect and what the law permits. This will help you file in the correct timeframe and contact the appropriate individuals.

Before You File

Step Into a More Straightforward Repair Process With Assurity

Repairing your vehicle before filing a diminished value claim can be overwhelming, especially if you’re trying to choose a reputable collision center. Assurity verifies auto collision centers’ ability to repair vehicles to their original specifications. When your vehicle is repaired based on the standards of the original equipment manufacturer (OEM), you’re less likely to run into repair-related diminished value. This also gives you more confidence in your car when you drive it again post-collision.

If you’re looking for a collision repair center to fix your vehicle, check out our shop locator today. This gives you a list of auto body shops that we’ve specifically audited for their ability to repair vehicles to their factory standards.

Always research your state’s specific laws regarding diminished value before beginning the claim process. Additionally, follow the insurance provider’s requirements for when you may submit a claim (usually after the vehicle has been fully repaired).

Quick Answers

Frequently Asked Questions

What drivers ask most about diminished value claims.

Know Your Rights
Does insurance have to pay diminished value?

The short answer is that no, third-party insurers do not have a blanket legal requirement to pay or offer diminished value claims to the other driver. However, if the driver collects strong, reliable evidence that their vehicle lost value in a collision, the at-fault driver's insurer may then be required to pay diminished value. Many insurance providers reject diminished value claims that they receive, and some courts will side with the insurer. But whether they're required to pay primarily depends on the strength of the evidence a driver can compile. If an independent appraiser demonstrates that the car lost value, and the collision wasn't the driver's fault, then the insurer typically must pay diminished value.

How long do I have to file?

In most states, you have between two and five years to file a diminished value claim. Rhode Island is an outlier, giving drivers ten years to file. It's usually best to file immediately after a collision so the situation is fresh in your mind; it may also demonstrate more urgency to the at-fault driver's insurer when you're submitting a claim. Check your state law to know for sure.

Is it worth it to hire an appraiser?

It's usually worthwhile to hire an independent appraiser to gauge your car's prior- and post-collision value. Insurance providers often take appraisers' analyses seriously, and they're more likely to accept an independent assessment than a guess made by the driver. While it's never a guarantee, a well-documented appraisal does give you a better chance of receiving a dollar amount that's closer to the actual value your car lost in the collision.

Can I claim if my car is leased or financed?

Typically you can't file a diminished value claim if you are driving a leased vehicle. That responsibility lies with the owner of the vehicle, the leasing company who lent you the car. However, if you drive a financed vehicle, you are still the owner even if you don't have the title in hand, so you'll be able to file a claim.

How much does a diminished value claim pay on average?

Under the 17c formula insurers use, drivers typically receive less than $2,000, and sometimes less than $1,000. With an independent appraisal the insurer accepts, payouts can reach several thousand dollars. There's no reliable industry average, so treat any number you see online as a rough guide, not a promise.

Sources

This article is general information, not legal advice. Assurity is not a law firm. Diminished-value rights, deadlines, and payouts vary by state and by policy. Confirm the law where the accident happened and consider consulting a licensed attorney before you file.

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