Typically, a vehicle is worth less after it has been involved in an accident – even after it has been repaired. According to Carfax.com, the average impact on retail value of a vehicle increases to $2,100 when it is severely damaged in a crash.

You can file a diminished value claim with your insurance company to request the difference between your car’s value before the accident and what it is worth now. Unfortunately, your insurance company may not inform you when you are owed diminished value for your damaged vehicle. Rather, you will need to file a diminished value claim and demand compensation.

For your claim to be successful, you must prove that your car’s value has depreciated. If you have run into this challenge or were injured in a car accident, the personal injury lawyers at Judd Shaw Injury Law can help you gather the evidence needed to file a claim for your medical bills, diminished value, and other damages. Call us at 1-866-909-6894 to schedule a free case consultation. 

car accident attorney for diminished value claim

What Is Diminished Value?

Diminished value, sometimes called diminution of value, is the difference in a vehicle’s fair market price before and after an accident. Even if a car has been professionally repaired with original manufacturer parts, it will have a lower value than before the crash.

Most state laws allow you to file an insurance claim for diminished value after a car accident. Diminished value differs from depreciation, which refers to a vehicle dropping in value over time. You cannot file a claim for a vehicle that has simply depreciated.

Steps to Take When Negotiating a Diminished Value Claim

If your car sustained major damage in an accident, filing a claim to pursue compensation for diminished value is in your best interest.

The following are steps you may want to take when pursuing and negotiating a diminished value claim:

  • Request a copy of the police report. The police report that was completed by the officer dispatched to the scene can provide important information about the accident. For example, the police officers may have stated who they thought was at fault.
  • Consult a vehicle appraiser. An experienced appraiser who specializes in writing diminished value reports can help assess the decrease in your car’s value. The appraiser will consider factors such as the extent of damage done to the vehicle and the quality of the repairs.
  • Calculate the loss in value. Calculate the difference between your car’s value before the crash and what it is worth after repairs. Knowing the difference in your vehicle’s worth is essential to pursuing compensation for diminished value.
  • Gather evidenceYou must provide documentation showing the decrease in your vehicle’s value after the accident, which could include photos of your damaged vehicle, repair receipts, and appraiser’s reports.
  • File a claim. Your car accident lawyer can submit a demand letter on your behalf to the at-fault party’s insurance company. The insurer will either pay out your claim, deny it outright, or submit a counteroffer for a lower amount.

How to Calculate the Diminished Value of Your Vehicle After an Accident

Most car insurance companies in the US use a formula called 17c to calculate the diminished value of a vehicle after an accident.

The following is a summary of the formula for calculating diminished value:

  • Calculate the value of your vehicle. Use a website like Kelley Blue Book (KBB) or the National Automobile Dealers Association (NADA) to determine the value of your car before the accident.
  • Apply a 10 percent cap. It is common for insurance companies to apply a 10 percent cap to the sales value estimated by KBB or NADA. In other words, the most an insurer will pay out for the diminished value of a vehicle is 10 percent of the appraised value.
  • Apply a damage multiplier. Insurance companies use a damage multiplier to adjust the base loss of value. The 10 percent cap is multiplied by 0, .25, .50, .75, or 1, depending on the extent of structural damage to the car.
  • Apply a mileage multiplier. The mileage multiplier functions similarly to the damage multiplier. The insurance company will multiply the 10 percent cap value by a number ranging from 0 to 1, depending on the number of miles on your car.

While it is common for insurance companies to use the 17c formula when calculating the diminished value of a vehicle, this method has been criticized for being inaccurate and sometimes unfair to accident victims.

If you feel that the calculated diminished value of your vehicle is unfair, a car accident lawyer may be able to help you negotiate for a higher diminished value.

Compensation for Diminished Value Is Negotiable

Since many car accident victims are unfamiliar with the claims process of recovering damages for diminished value, they may think they need to accept the first offer made by the insurance company – but this is not always the case. Compensation for diminished value can be negotiated.

You have a much better chance of reaching a fair settlement agreement during negotiations if you have an appraisal from a certified vehicle appraiser backing up your diminished value claim. Professional vehicle appraisers have extensive knowledge of vehicle markets. They can analyze your crash damage as well as the quality of the repairs.

It is important to have a car accident lawyer on your side when filing a diminished value claim. A lawyer can calculate your claim’s worth, gather evidence, consult vehicle appraisers and other experts, send a demand letter for a specific amount, and help you negotiate a fair settlement with the insurance company.

Our Diminished Value Accident Lawyers Can Negotiate Your Claim

Recovering fair compensation from the insurance company for the diminished value of your vehicle is not always a straightforward process. Insurance companies are businesses and want to pay out as little money as possible for car accident claims.

You have options. For instance, the personal injury lawyers at Judd Shaw Injury Law have years of experience negotiating various types of car accident claims. We know what evidence is needed to prove your vehicle’s loss in value and make a compelling case for why you deserve maximum compensation.

Our law firm handles diminished value and all car accident cases on contingency. Judd Shaw Injury Law offers all of our clients our No Fee Guarantee®. Contact us 24/7 at 1-866-909-6894 or complete the online form to schedule a free consultation. 

Zoom Screenshot_16.png

Content edited by personal injury attorney Judd Shaw. From the beginning, Judd established a set of Core Values laying out the pursuit for excellence in client service. He is a regular host of the Working The Wow podcast, with the belief that providing an exceptional client experience is just as important as delivering a quality service or product. You can find us in Red Bank and Tom‘s River, New Jersey.