How do you calculate a diminished value claim?

According to formula 17c, to calculate the decrease in the value of your car, you must take the value of your vehicle and multiply it by a maximum limit of 10%. Next, you would apply a damage-based damage multiplier to your car and a mileage multiplier based on your mileage. And if you think the accident brought down the car's market value, you'd also file a decreased value claim with your insurer. Understanding how insurers calculate the decrease in value will help you negotiate optimal compensation.

If you decide to file a low value claim, “deal with it now and act quickly,” Zander says. By filing a reduced value claim, you may be able to recover part of the car's depreciated value. Generally, the diminished amount can be charged to the at-fault party's insurer and should be claimed when an accident occurs that you didn't cause. A reduced value claim allows you to recover the difference between the value of your car before and after a car accident.

Insurance companies may be required to pay a reduced value claim, depending on state laws and who was at fault. Diminished value is an insurance concept that was initially developed to estimate the loss in value of a car after an accident. According to formula 17c, the amount of mileage in a car affects the diminished value twice, once below the market value of NADA and once when evaluating the mileage multiplier. There is no single diminished value calculator for the entire industry, and insurance companies generally don't offer the formula they use, Zander says.

File a reduced value claim as soon as possible, ideally in the days following the accident, as states have statute of limitations for property claims. Research your state's laws to better understand your rights in relation to the decline in value of your vehicle. If your mechanic uses low-quality parts or performs poor repairs on your car, you may experience a repair-related decrease in value. Even if your car has no obvious damage, its value may inherently decrease, as you may have a legal obligation to disclose to any potential purchaser of the vehicle who has been previously involved in an accident.

Although insurers usually use the 17c formula to calculate the decline in the value of a vehicle, it has many defects that could result in lower value valuations than the actual value of a car. Most other states don't allow reduced value claims as long as the insurer fulfills its duty to repair or replace the car.

Darrell Trimboli
Darrell Trimboli

Wannabe tv buff. Certified web scholar. Subtly charming tv maven. Avid tv guru. Hardcore beer specialist. Infuriatingly humble student.

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