How to Handle Diminished Value

Navigating Diminished Value After an Accident

Hi everyone, I appreciate any insights you can provide!

Here’s my situation: I have a 2024 Ford F-250 that’s just a month old and has only 700 miles on it. Unfortunately, it was rear-ended, but thankfully it wasn’t totaled. The MSRP is $69,000.

The repairs are in progress and should be finished by next week. However, I’m now trying to figure out how to address the diminished value of my vehicle. Since there aren’t any comparable models on the market, I’m considering the 17c formula, but I’d like to confirm if that’s the best approach.

I’m also wondering how to initiate this conversation with the at-fault party’s insurance. Should I include this in the same claim and present all my information to the adjuster, or is it better to handle it as a separate claim?

Just a reminder, I’m located in California. Thanks for your help!

One thought on “How to Handle Diminished Value”

Hello! I’m sorry to hear about your accident, but it sounds like you’re on the right track thinking about diminished value (DV) for your F-250. Here are some steps and considerations for handling it:

Understanding Diminished Value

What is Diminished Value?
Diminished value refers to the loss of value a vehicle experiences after being repaired following an accident, compared to its pre-accident value.

Approaching Diminished Value Claims

The 17c Formula:
The 17c formula can be a good starting point as it provides a way to calculate the diminished value, especially when you’re dealing with vehicles that have a clear resale value. The formula considers the vehicle’s pre-accident value and the severity of the damage.
The formula is:
[
\text{DV} = \text{Pre-Accident Value} \times \text{Damage Severity} \times \text{Mileage Multiplier}
]
Since your vehicle is almost new, your pre-accident value is likely still very close to the MSRP.
Documentation:
Gather evidence to support your claim for diminished value. This includes:
- Repair estimates and invoices.
- Pictures of the damage and repairs.
- Market research proving the value of similar vehicles (even if few exist).
- Vehicle’s VIN and service history.

Filing a Claim with Insurance

Single or Separate Claim?
You should handle the diminished value claim as a separate claim from the original property damage claim, especially since it requires specific documentation and may depend on the market value.
Once repairs are complete, reach out to the at-fault party’s insurance and present your diminished value claim.
Approaching the Adjuster:
Contact the adjuster from the at-fault party’s insurance and explain that you intend to pursue a claim for diminished value.
Present your findings, calculations (like the 17c formula), and any supporting documents you’ve gathered.
Be ready for negotiations, as insurance companies may initially offer less than expected.

Navigation Tips:

Be Professional: Keep your communication polite and professional, even if discussions become frustrating.
Know Your Rights: Familiarize yourself with California insurance laws and your rights regarding diminished value claims.
Follow Up: If you don’t get a response or resolution promptly, don’t hesitate to follow up regularly.

Additional Resources

Consider consulting with a lawyer or claims expert who specializes in auto insurance claims in California if you encounter difficulties.

I hope this helps clarify the process for you! Good luck with your claim, and I hope your vehicle is back to normal soon!

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