What diminished value is
State regulators describe it the same way: the difference between your car's market value before the accident and its market value after it is repaired. An accident on a vehicle history report makes buyers and dealers pay less, so the loss is real even when the repair is flawless. It is separate from the repair bill and from loss of use (rental).
The 17c formula
Many insurers value diminished value with a formula named after Section 10 of a 2002 order of the Superior Court of Muscogee County, Georgia, in the Mabry v. State Farm case:
Diminished value = 10% of pre-accident value × damage modifier × mileage modifier
Both modifiers are between 0 and 1 and are chosen by the insurer, so the result can never exceed 10% of the car's value and is usually far less. A federal court's published order shows one insurer's letter applying it: a car valued at $14,755 with $6,000 in repairs, a base of 10% (about $1,476), a damage modifier of 30% and a mileage modifier of 11%, for a payment of $48.76. In the same case, a car with over 100,000 miles was given a mileage modifier of 0%, so it received nothing. The Georgia Supreme Court itself did not adopt any formula; it let the insurer develop its own method.
The market method
The market method asks what the car is actually worth now: an independent appraiser, or written offers from dealers who know the accident history, compared with its pre-accident value. On the default numbers above, the market method shows a loss of $4,500 against $900 from 17c. Regulators in Maryland and Washington stress that the claimant must prove the loss, and an appraisal or dealer valuation is the usual proof.
Who pays
| Claim | Generally |
|---|---|
| Against the at-fault driver's liability insurer (third party) | Allowed; you must prove the loss |
| Under your own collision coverage (first party) | Usually not covered; Georgia is the main exception |
| Under your uninsured or underinsured motorist coverage | Possible in some states, such as Texas |
Examples from state regulators: the Texas Department of Insurance says an insurer is not obligated to pay first-party diminished value when a car is fully repaired, but may owe a third-party claimant for lost market value. Florida's Department of Financial Services says courts allow it in third-party claims but not first-party claims. Maryland's Insurance Administration calls it a valid part of a liability claim against the at-fault party. Georgia's insurance commissioner directed insurers in 2001 to assess and pay it on first-party physical damage claims.
How to claim
- Get the repair done and keep the final invoice and photos.
- Get an independent diminished value appraisal, or written offers from two or three dealers that reflect the accident history.
- Send a written demand to the at-fault driver's insurer with the appraisal, the repair invoice and the vehicle history report.
- If they answer with a 17c number, point to the market evidence; the formula is the insurer's choice, not a legal requirement.
The step-by-step diminished value claim guide covers letters, deadlines and appraisals.
Frequently asked questions
What is diminished value?
It is the difference between what your car was worth just before the accident and what it is worth after it has been repaired. Buyers pay less for a car with an accident history, even when the repair is perfect.
Can I claim diminished value from my own insurance?
Usually not. State insurance regulators in Texas, Florida and Maryland say standard policies do not cover first-party diminished value, and Washington notes some policies do not. Georgia is the main exception: after the 2001 Mabry decision, its insurance commissioner directed insurers to assess and pay it on first-party claims.
Can I claim diminished value from the at-fault driver?
Yes, in general. Diminished value is a recognized part of a property damage claim against the driver who caused the crash and their liability insurer. You have to prove the loss, usually with an independent appraisal or written valuations from dealers.
Why is the 17c formula criticized?
It starts by capping the loss at 10% of the car's value, then cuts that with two modifiers chosen by the insurer. In a published federal case the result on a car worth $14,755 with $6,000 in damage was under $50. A market appraisal often finds a much larger loss.
How long do I have to file a diminished value claim?
It is a property damage claim, so the property damage statute of limitations applies: from 2 to 10 years depending on the state (see the table). Settle it before or together with the repair claim if possible, and do not sign a release that covers it by accident.
Sources
Checked November 5, 2026.
- Tiller v. State Farm, No. 1:12-CV-3432 (N.D. Ga. Feb. 5, 2013), order describing the 17c letter (govinfo)
- State Farm v. Mabry, 274 Ga. 498 (2001), Georgia Supreme Court opinion (archived copy)
- Georgia Insurance Commissioner Directive 01-P&C-1, diminution of value, first party claims (2001, archived)
- Texas Department of Insurance, Commissioner's Bulletin B-0027-00 on diminished value
- Florida Department of Financial Services, personal automobile insurance overview
- Maryland Insurance Administration, A Consumer Guide to Auto Insurance
- Washington Office of the Insurance Commissioner, filing an auto insurance claim