What is Diminished Value and How is it Calculated?
Properly calculating Diminished Value is widely misunderstood, and often inaccurate in the auto industry - even among companies consumers turn to as authorities in auto values. Generic percentages, duplicated deductions, and bottom-line caps are designed for simplicity and to limit the insurer’s financial responsibility - failing compensate your vehicle’s true value loss.
Diminished value can come as a big surprise - blindsiding people who weren't aware of the impact, or being much more costly than was actually thought to be lost.
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Imagine - You find the perfect car and are ready to buy. Maybe, you’ve been causally shopping for a while. Perhaps, it’s your dream car and you’ve been saving for years. Or possibly, it’s a milestone reward.
You’re counting on your trade-in to make the numbers work. But then it comes back lower—because of an accident you didn’t cause. The insurance company paid you $500 for your diminished value. It felt settled.
Until now - Because the real impact shows up later… when your trade-in is worth $3,000 less. That’s $2,500 out of your pocket - for damage that was never your responsibility.
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Our Diminished Value Calculator helps you estimate a more accurate market value loss after an auto accident. As industry experts, Claim Complete Auto evaluates diminished value with a deep understanding of the repair processes involved to restore collision damage and the market value impact repairs can have on original factory component integrity - even after quality repairs are completed.
Lets take a look at what diminished value is... and what diminished value isn't.
How Do Insurers Calculate Diminished Value?
Stigma Value -
Often, insurers refer to Diminished Value as 'Stigma' - or a change in your vehicle history report which was clean prior to the accident, and has now been tarnished due to the accident. Often, the presence of a prior accident is considered a disqualifier for a new diminished value claim.
While the presence of an accident in your vehicle history is relevant, and may change how your diminished value is calculated, it's not the only factor that affects a vehicle's value after an accident.
The primary driver of Diminished Value is the compromised condition of it's factory state. There may be additional body filler present (making panels more rigid), heat is often necessary to repair damaged metal (altering the molecular structure of metal in the repair area.), or alternative parts may have been used (unverified for safety or performance). These are just a couple of the items that impact calculating diminished value.
The 17c Formula -
The 17c Formula is the most heavily relied upon advertised diminished value calculation in the auto industry. It is also HIGHLY inaccurate and misconceived.
In 2001 there was a Georgia Supreme Court diminished value class action lawsuit (Mabry v. State Farm). The court approved a formula to use in the negotiated class-wide settlement in paragraph 17, section c, of their ruling - thus the '17c' Formula was born.
While this formula may have been useful as a negotiated calculation for a large class settlement, this is NOT an accurate method of calculating diminished value for individual losses. Some of the fundamental flaws of this class-application formula are that it applies duplicative deductions as well as a 10% cap of ACV. This means that if your vehicle's actual cash value is $30,000, and your diminished value due to a loss is $8,000 - the 'cap' would only allow for a $3,000 maximum result.
In addition, many sources cite this formula as being an 'approved formula' by the state of Georgia, which is also inaccurate. In 2008, this widespread falsehood prompted the Georgia Insurance Commissioner to issue a Public Directive ordering anyone using, or insinuating, this formula had been approved by the state to Cease and Desist use of that communication.
Our Diminished Value Calculator Is Different
The Claim Complete Auto Diminished Value Calculator helps you to calculate and understand the actual impact your vehicle damage may have had on it’s value - without duplicated deductions or applied caps. With principles of a commitment to quality, accuracy, and fair consumer compensation, Our proprietary, independent online calculator uses your actual vehicle repairs to establish a more accurate due to an auto insurance loss.
Diminished Value is an unseen, delayed, loss of market due to an accident. Aside from the physical damage, the loss of market value is due to changes in the vehicle composition - or its factory state - which can impact performance, consumer confidence, and longevity.
Because Diminished Value is independent of the physical accident damage, it can be owed to you regardless of whether you decide to repair your vehicle or not.
Inherent Diminished Value is a value depreciation that exists even after quality repairs due to essential or characteristic changes in factory attributes. These changes occur due to both processes require to complete the repairs, and due to environmental restrictions that prevent repair restoration to that of factory quality. Any repair work done to your vehicle permanently alters it from it's original state.
You may also be owed Loss of Use expenses for your accident - even if you were provided with a substitute rental. Purchase of our Calculator Bundle provides access to both calculated reports at a discounted rate.
Diminished Value Calculator
Nationwide Coverage
Important Diminished Value Calculator Tips -
Be sure to check your Junk or Spam email folder for your calculator instructions, and mark us as an approved sender.
Be sure to save your calculator link, username, and password for future access.
It is recommended that specialty, custom rebuild, or heavily modified vehicles have a full comprehensive appraisal.
Who Qualifies for Diminished Value?
State and Policy Specific
Diminished Value recognition may vary state by state. Your local insurance commissioner is an excellent resource for consumers to help with clarifying coverage if needed.
It's also important to read your policy wording. Some policies specifically exclude coverage (such as diminished value under comp/coll) that other insurers don't. It is always essential to understand what coverage you have for all aspects of your policy.
Small Claims
If all attempts at recovery through the insurer have failed, small claims court may be your only other option. Many consumers don’t pursue this avenue - in fact, insurers are betting on it. If you choose not to be unfairly compensated after your loss, your Claim Complete Diminished Value Calculator can be used as evidence in your small claims case.
If you are the at fault party being taken to small claims, be sure to notify your insurance carrier. While they are usually prevented from representing you in small claims, the do have a contractual duty to indemnify you in the event of a loss - so you may be able to recover any judgement against you.
Coverage
Fault: Diminished value is only recoverable under an auto accident claim if you were not at fault for the accident.
Third Party - PD (Liability) Coverage: As a Third Party Claimant, you would be eligible for a diminished value claim with the at fault drivers insurance carrier.
First Party - UMPD Coverage: If the other party was not insured, you may qualify with your own insurer under your UMPD coverage.
What You’ll Need To Calculator Your Diminished Value
Repair Estimate or Final Bill
If you are not planning to repair your vehicle damage your repair estimate will be sufficient for your calculations. If you are having repairs completed it is recommended to complete your diminished value calculation after all repairs have been completed, using your Final Bill for reference.
Vehicle Diagram
Claim Complete Auto™ calculator diagrams are designed as a reference tool to help you identify the extent of work completed in your vehicle repair. Instructions are included in the confirmation email you'll receive after purchase.
Your Diminished Value Calculator Questions, Answered
For additional assistance email support@claimcompleteauto.com
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No - as discussed above this is NOT an accurate individual loss calculation method. Our calculators are detailed and results are based on the actual damage and/or repairs needed for your vehicle.
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Yes - once you complete your calculations you have the option of downloading a PDF report of your results. If fact, you have access to the calculator for 72 hours - so any mistakes or adjustments are able to be corrected and reprinted as needed.
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Yes - After your calculator purchase, you will receive an email with step-by-step instructions for calculating your Diminished Value Claim. If you don't see the email, please check your junk folder and mark us an an approved sender. If you don't see your instruction email there, or have any issues using the calculator at all, please contact us at support@claimcompleteauto.com.