Diminished Value Claims Explained

Last Updated on December 28, 2025

Even after quality repairs, a car that’s been in a wreck can be worth less simply because it now has an accident record. Buyers (and dealers) tend to discount vehicles that show prior damage—especially if the collision involved structural components, airbags, or visible cosmetic issues like chipped paint or scratches. That lost resale value is called diminished value, and in many situations you can try to recover it through a diminished value claim.

Key Takeaways

• A diminished value claim seeks compensation for the loss in resale value that can remain even after your vehicle is fully repaired.
• In most states, diminished value is typically pursued against the at-fault driver’s insurer (third-party claim), not your own policy.
• Insurers may reference the 17c formula as a starting point, but market-based evidence (comparables and appraisals) often supports a stronger claim.
• Your best results usually come from strong documentation: photos, repair invoices, pre-loss condition proof, and a clear written demand with a supported dollar amount.

What Is a Diminished Value Claim?

A diminished value claim is a request for compensation for the difference between what your vehicle was worth right before the accident and what it’s worth after the accident (even after repairs). In most states, diminished value is most commonly pursued as a third-party claim against the at-fault driver’s insurance carrier. Some states and policy types may allow certain first-party diminished value claims, but it’s far less common.

Why does value drop if the car is “fixed”? Because the market often treats two otherwise identical vehicles differently if one has an accident history. Dealership reconditioning standards, buyer concerns, and vehicle history reports can all lead to a lower offer when it’s time to sell or trade in.

The Types of Diminished Value

You’ll usually see diminished value discussed in three categories:

• Inherent diminished value: The most common type. It’s the loss in resale value that remains even after proper repairs, simply because the vehicle now has a damage history.
• Immediate diminished value: The difference in value immediately before and immediately after the crash (before repairs). This is less commonly used because most people repair the car before selling it.
• Repair-related diminished value: Loss of value caused by subpar repairs or incomplete restoration (for example, mismatched paint, improper panel alignment, lingering warning lights, or non-OEM parts that reduce market value).

When a Diminished Value Claim Makes Sense

Diminished value claims tend to be strongest when the vehicle is newer, has relatively low mileage, and the damage was significant enough that a buyer would care. You may have a better shot if:

• You were not at fault (or were only minimally at fault) and you’re pursuing the at-fault driver’s insurer.
• The vehicle is a late-model car, luxury vehicle, or a trim level that holds value.
• The accident involved airbags, structural repair, frame work, suspension components, or extensive panel replacement.
• You’ve got clean documentation and professional repair invoices.

If you’re still deciding whether to open a claim at all, read this first: Should you make a claim after a car accident? In some scenarios, a smaller claim can backfire if it leads to premium increases or a claim on your record—so it’s worth thinking through the full picture.

How Diminished Value Is Calculated

There isn’t one universal diminished value calculator that applies everywhere. In practice, insurers and appraisers typically rely on market-based comparisons (what similar cars sell for with and without an accident) and/or simplified formulas. The goal is the same: estimate the vehicle’s pre-accident market value and compare it to the post-repair market value.

The 17c Formula (Commonly Used as a Starting Point)

You’ll often hear about the “17c” formula, which is widely discussed because it’s tied to a Georgia diminished value dispute (and many insurers use 17c-style worksheets in negotiations). The key thing to know: 17c is not a guaranteed nationwide standard, and the inputs can vary by carrier. Still, it helps to understand how the math works because it’s a common baseline offer method.

A typical 17c-style calculation looks like this:

1. Estimate pre-accident value using a pricing source (for example, J.D. Power car values (formerly consumer-facing NADA values)) along with mileage, options, and condition.
2. Apply a base cap (often up to 10% of pre-accident value in 17c-style worksheets).
3. Apply a damage multiplier based on severity (commonly 0.00 to 1.00).
4. Apply a mileage multiplier that reduces diminished value as mileage increases.

Important: A formula can understate real-world loss—especially for newer vehicles or higher-end cars. If the insurer’s number feels low, a market-based appraisal can carry more weight than arguing multipliers.

Market-Based Appraisals (Often Stronger Than Formulas)

Many successful diminished value negotiations are driven by documentation and comparable sales rather than a formula. This usually means gathering a professional diminished value appraisal or support from a dealer/valuation expert that explains how similar vehicles sell for less after an accident.

When building your case, it helps to document the car’s pre-loss condition as clearly as possible (maintenance records, photos, prior inspections, and any evidence of condition before the collision).

How to File a Diminished Value Claim

Start with the fundamentals of the accident claim process, then treat diminished value as a separate, clearly stated request. This guide on the proper way to file an insurance claim after an accident is a helpful primer if you’re early in the process.

Step-by-Step Checklist

• Confirm eligibility: In many states, diminished value is pursued against the at-fault driver’s insurer. If you’re filing with your own insurer, check your state rules and your policy language.
• Move quickly: Deadlines vary by state and claim type—use this as a starting point: How long do you have to file an insurance claim after a car accident?
• Collect documentation: police report, photos, repair estimate, final repair invoice, and proof the repairs were completed.
• Estimate pre-accident market value: cross-check values using at least one pricing source like KBB.com and local listings for similar vehicles.
• Get a diminished value opinion: ideally a third-party appraisal or written dealer statement that supports the post-repair value reduction.
• Submit your demand: provide a short letter stating your vehicle details, accident date, repairs performed, your supporting valuation, and the exact amount you’re requesting.

If you’re dealing with a difficult carrier, it helps to know what’s normal (and what’s not) among the best auto insurance companies in America—especially if you’re considering switching insurers after the claim is resolved.

What If the Insurance Company Lowballs or Denies the Claim?

It’s common for insurers to start with a conservative offer—sometimes based on a rigid formula. If the number doesn’t match your documentation, you can counter with your appraisal, comparable sales, and repair records. These negotiation tactics can help: How to negotiate an auto insurance settlement.

Carriers can also deny the claim for reasons like disputed liability, insufficient proof of loss, policy limitations, or disagreement about the valuation method. If you believe the denial is improper, options may include escalation to a supervisor, your state insurance department, appraisal/alternative dispute provisions (if available), or small claims court depending on your situation.

If the insurer isn’t denying your claim but keeps dragging things out, here are practical steps to take: What can I do if my car insurance company won’t pay or is stalling?

FAQs on Diminished Value Claims

Bottom Line

Diminished value is real—and for the right vehicle and the right accident, it can be meaningful. The strongest claims are built on documentation, realistic market comparisons, and a clear written demand. If you’re not getting traction, don’t assume the first offer is the best offer—many diminished value outcomes improve with a well-supported counter.