How to File a Diminished Value Claim

When the value of your car decreases due to a collision, you may be able to recoup those losses by filing a diminished value claim.
Location pin icon
No junk mail. No spam calls. Free quotes.

Why you can trust The Zebra

The Zebra partners with some of the companies we write about. However, our content is written and reviewed by an independent team of editors and licensed agents. Reference our data methodology and learn more about how we make money.

Author profile picture

Renata Balasco

Senior Content Strategist

  • Licensed Insurance Agent — Property and Casualty

Renata joined The Zebra in 2020 as a Customer Experience Agent. Since 2021, she has worked as licensed insurance professional and content strategist.…

Author profile picture

Beth Swanson

SEO Content Strategist

  • Licensed Insurance Agent — Property and Casualty

Beth joined The Zebra in 2022 as an Associate Content Strategist. She is a licensed insurance agent whose goal is to make insurance content easy to r…

Diminished value after damage to a vehicle

If your car is damaged in a collision, its resale value will decrease — even if it’s fully repaired. This is called diminished value.

If you're concerned about taking a hit on your vehicle's resale value, consider requesting compensation via a diminished value claim.

damaged mirror

Key Takeaways:

  • After sustaining damage, your car may not be worth as much as similar vehicles - this may allow you to file a diminished value claim
  • There will be a formula used to calculate what the vehicle may be worth, considering factors like the specific damage sustained, repairs made and current mileage
  • If you were the driver at fault when the car sustained damages, you likely won't be eligible for a payout for this type of claim
  • Each state has different laws when it comes to diminished value claims - be sure to research your state's regulations before making a claim

What does diminished value mean? 

Diminished value, or diminution of value, refers to the difference in the market price of a vehicle before and after an accident. Even if your car is repaired to full function, its involvement in a collision means its value is lower than that of a similar vehicle not involved in a crash.

Diminished value is not to be confused with depreciation, which is the drop in market value as the vehicle ages further from its manufacture date. Depreciation still applies in resale values, but unlike diminished value, there is little you can do to avoid this drop in price.

Three types of diminished value

wrecked car
Immediate diminished value

This type represents the difference in the resale value of the car immediately following the accident, but before repairs have been made. This type is rarely used in diminished value claims, as repairs are most often made immediately after accidents.

happy face keychain
Inherent diminished value:

The most common form used in claims, inherent diminished value represents the amount the vehicle’s worth will reduce based on accident history, assuming all repairs have been made to optimal quality.

question magnifying glass
Repair-related diminished value

While inherent diminished value is dependent on high-quality repair jobs, repair-related diminished value is used when the repairs made to the vehicle are of sub-standard quality — for example, if aftermarket parts are used or the paint color on the replaced part is not an exact match to the original. This type assumes that the vehicle cannot be restored to its original condition.

What is a diminished value insurance claim?

When it comes time to sell your vehicle, you’ll notice that the resale value is lower than similar vehicles on the market if it has been in a crash. In some cases, you may be able to file a claim with your car insurance company to recoup these losses. This is called a diminished value insurance claim. You would file this claim with the insurance company of the at-fault party; it is largely prohibited to file such a claim against your own provider. Each insurance company and state will have its own policies regarding diminished value claims, so it’s important to ensure that the provider offers compensation for diminution in value before proceeding. Even if the provider does not offer payouts for diminished value claims, you may still be able to file with your state.

Compare rates from top companies and save on auto insurance.

Location pin icon
No junk mail. No spam calls. Free quotes.

Calculating diminished value

If you find out the insurance company does offer diminished value claim payouts, it is still a good idea to try to calculate the exact amount of lost value and compare it to the amount the insurance company is willing to pay. Most insurance companies will use the 17c form to calculate diminished value. The formula is as follows:

man at standing desk

Step 1: Check your car’s pre-loss value 

Use a source like Kelley Blue Book to determine your car’s value by make, model and year. This will be our base number, representing what your car’s resale value would be if it had never experienced an accident. 

Step 2: Apply a 10% cap to that value. 

Insurance companies often apply a cap known as the "base loss of value." This is the maximum your carrier will pay for a diminished value claim.

Step 3: Apply a damage multiplier

The 10% cap value is multiplied by a number ranging from 0.00 to 1.00. That number represents the extent of the damage to your vehicle.

See below the diminished value scale:

Multiplier Level of damage
0.00 No structural damage
0.25 Minor damage to structure and panels
0.50 Moderate damage to structure and panels
0.75 Major damage to structure and panels
1.00 Severe structural damage

Step 4: Apply a mileage multiplier

Miles driven on your car is also taken into consideration by insurance companies when calculating these claims. Multiplier levels are in increments of .20.

Mileage is assessed as follows:

Multiplier Mileage
1.00 0 - 19,999
0.80 20,000 - 39,999
0.60 40,000 - 59,999
0.40 60,000 - 79,999
0.20 80,000 - 99,999
0.00 100,000+

Diminished value calculation example: 

Let’s say the market value of your car according to Kelley Blue Book is $12,000. First, take 12,000 and multiply it by 10% to account for the 10% cap. 12,000 x .10 = 1,200. The new number we’re working with is $1,200. This is the maximum amount your insurer would pay out for a diminished value claim.

  • The accident you were in caused moderate damage to the structure and panels of your car. Now take 1,200 and multiply it by the value for moderate damage. 1,200 x .50 = 600.
  • There are 20,000 miles on your vehicle. By applying the appropriate mileage multiplier to the new number calculated in step 3, we have 600 x 0.80 = 480.
  • The diminished value of your car is $480 based on these circumstances.

To determine the new resale value of the car, ask your dealership what your vehicle’s trade-in value is now, post-accident. The difference between the Kelley Blue Book value and the trade-in value should also give you a ballpark idea of the diminished value.

Is the number you calculated in formula 17c (or the difference in trade-in and market value) equal or less than what the insurance company is willing to pay out? If so, you may wish to proceed with the diminished value claim.

piggy bank

How to file a diminished value insurance claim

These claims are often a bit trickier to navigate than others because the burden of proving the diminished value is largely on the customer. There are a few things to know before beginning the claims process:

  • If you were the party at fault for the accident, you are not likely to receive a claim payout. You are much more likely to have success with the insurance company if the accident was caused by someone else. If the at-fault driver is uninsured, you will need to have had uninsured motorist coverage on your policy in order for a diminished value claim to be processed.
  • Documentation will be required to account for all aspects of your claim. The insurance company will ask for the value of your vehicle from a trusted source (like Kelley Blue Book). You may also need to provide photos of the accident and records of the repairs made.
  • You will need to prove your car’s diminished value. To do this, come prepared with the calculations from form 17c, or you may need to get it appraised by a professional. A certified appraiser might be key to securing your insurance payout.
  • Every state has different laws regarding diminished value claims. Be sure to research your state’s regulations before proceeding with a claim. States that currently allow drivers to recover for diminished value include:

Best practices in filing diminished value claims

Always file a diminished value claim with the at-fault party's insurer. If they were uninsured or the company does not offer assistance, speak with your own provider about next steps. You may be entitled to file a claim with the state if you live in one of the states listed above. Contact your state’s department of insurance to proceed.

Filing your claim as soon as possible is your best chance at recouping diminished value losses.

Using a third-party adjuster might also be a good tactic in receiving an accurate and certified numerical value to present to the carrier.

Be aware that because diminished value claims are more complex to file and harder to collect from, you may consider legal counsel, or you may need to prepare for small claims court proceedings.

Is filing a claim worth it?

Ultimately, that is up to each driver to determine. Each situation is unique, and since the diminished value calculation is dependent on so many factors, only once you gather the proper information may you determine a claim’s worth. With variances in insurance carrier policies, state regulations, level of damage and age of your vehicle, each driver’s situation is distinct. If you decide that you do want to proceed with filing your claim, the information here should serve as ample preparation for your diminished value claim.  If you've already filed a claim and seen a rate increase, it's a good idea to see if other insurers can offer you a better price. Enter your zip code below to compare quotes side-by-side or check out The Zebra's Guide to Car Insurance Quotes for additional information.

online insurance quote

Compare car insurance quotes and find a policy that fits your needs.

Location pin icon
No junk mail. No spam calls. Free quotes.

About The Zebra

The Zebra is not an insurance company. We publish data-backed, expert-reviewed resources to help consumers make more informed insurance decisions.

  • The Zebra’s insurance content is written and reviewed for accuracy by licensed insurance agents.
  • The Zebra’s insurance editorial content is not subject to review or alteration by insurance companies or partners.
  • The Zebra’s editorial team operates independently of the company’s partnerships and commercialization interests, publishing unbiased information for consumer benefit.
  • The auto insurance rates published on The Zebra’s pages are based on a comprehensive analysis of car insurance pricing data, evaluating more than 83 million insurance rates from across the United States.