When you've been in an accident that wasn't your fault, you may be entitled to a diminished value claim. This is a claim for the difference between the value of your car before and after the accident. Understanding how insurers calculate the decrease in value will help you negotiate optimal compensation. The formula used to calculate the decrease in the value of your car is known as Formula 17c.
This formula takes the value of your vehicle and multiplies it by a maximum limit of 10%. Then, a damage-based damage multiplier and a mileage multiplier based on your mileage are applied. If you decide to file a diminished value claim, it's important to act quickly. 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.
Insurance companies may be required to pay a diminished value claim, depending on state laws and who was at fault. However, there is no single diminished value calculator for the entire industry, and insurance companies generally don't offer the formula they use. It's important to file a reduced value claim as soon as possible, ideally in the days following the accident. This is because 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 Formula 17c 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.