Diminished Value Calculator

The Claim Process Simplified: From Free Consultation and Estimate to Success

How to Calculate the Diminished Value of Your Vehicle? There is no legal standard for calculating diminished value but there is case law (Canal Ins. Co. v. Tullis) and appraisal standards such as USPAP and The Model Act set by the National Association of Insurance Commissioners.


1. Most people think they can print out a consumer guide and say this is my claim or estimate a loss, this is wrong and illegal. First of all consumer guides do not show accurate sales data and secondly you are not an expert to estimate actual damage severity.

2. Many companies use a damage percentage to cost of repairs ratio, this is especially seen on instant/ automated assessment reports. This is illegal: Model act (Unfair Property/casualty claims settlement practices model regulation) from The National Association of Insurance Commissioners (NAIC) “Decrease in Value Claims” has said any formulas such as percentage of repair cost, may not be used to determine the decrease in value Section 8E.

3. Many people go to a dealer and get a print out of the trade in estimate, this is also inaccurate and inadmissible in most courts as it serves as secondary evidence if you have primary evidence from an expert. Let me explain, first of all the dealer is not a disinterested party and so they are biased and will offer you the lowest amount possible. Secondly, you are going to the dealer on a false premise. If you ask a dealer to give you a letter on a letter head with there name, number and signature and ask them for an opinion of the amount of loss and offer to even pay them it will be an automatic no from them since it is direct liability against them for insurance fraud or a lot of time it will cost them if it gets wrapped up in court for fraud.

The correct way of calculating diminished value is with market sales data which is not available to consumers, expert knowledge of severity of damage which most consumers do not have and by creating a valuation floor based off of previous sales, current market comparable’s and data provided by the repair report, body shop and the actual vin number.


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How insurance companies calculate diminished value claims? The insurance company uses NADA which is insurance friendly, it only accounts for a percentage of market transactions, does not account for vehicles involved in car accidents. NADA guides does not recognize diminished value.

17C Formula: What is it and how does it work? The formula starts off with NADA calculation of your vehicle based on the year, make, model, miles and options and based off of that amount a 10% cap is set. So if your car is $30,000.00 the cap would be 10%.

The second part of the deduction is a damage modifier, what it means is that if your car has no structural/frame or unibody damage it has $0.00 diminished value and if it has previous damage even a scratch it has $0.00 diminished value.

Modifier Extent of Damage
1.00 Severe damage to the structure of the vehicle
0.75 Major damage to the structure and panels
0.50 Moderate damage to the structure and panels
0.25 Minor damage to the structure and panels
0.00 No structure damage
0.00 Previously structurally damage vehicle
0.00 Previous total loss history

The Third part of the calculation is a second mileage deduction from 0.00-1.00 (Please note if the car has 100,000 miles the diminished value is $0.00 according to the formula and if it has 0.01 it is 10% of the 10% cap. Meaning $30,000.00 would be $300.00 diminished value)

Modifier Mileage
1.0 – 0.91 0 – 9,999
0.9 – 0.81 10,000 – 19,999
0.8 – 0.71 20,000 – 29,999
0.7 – 0.61 30,000 – 39,999
0.6 – 0.51 40,000 – 49,999
0.5 – 0.41 50,000 – 59,999
0.4 – 0.31 60,000 – 69,999
0.3 – 0.21 70,000 – 79,999
0.2 – 0.11 80,000 – 89,999
0.1 – 0.01 90,000 – 99,999
0.00 100,000 plus

How To Calculate Diminished value? By law you are not an expert and should not try to calculate diminished value on your own.


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