How to Calculate Diminished Value

Find out if you’re getting ripped off on your car insurance in less than two minutes.
No long forms · No spam · No fees
Knowing how to properly calculate your car’s value following an accident can help you determine if it has suffered any diminished value.
After an accident, most often a car can suffer from diminished value. Diminished value means that regardless of how successfully a car was fixed, you cannot get the same out of it as you could for a similar car that hasn’t suffered an accident. Luckily, you can file a diminished value claim in most states.

How to calculate diminished value

Step 1: Research your state laws. Before filing a diminished value claim, learn your state laws in regards to such claims. State laws dictate whether you make a diminished value claim against your own insurance or the insurance of the other driver, as well as how to calculate a diminished value claim.
In addition, all states require you to seek a claim within a set time period by imposing a statute of limitations on diminished value claims, as detailed in the following table from Diminished Value Car Appraiser:
Diminished Value Statute of Limitations by State
State Statue of Limitations by Year
Alabama 2
Alaska 6
Arizona 2
Arkansas 3
California 3
Colorado 3
Connecticut 2
Delaware 2
District of Columbia 3
Florida 4
Georgia 4
Hawaii 2
Idaho 3
Illinois 5
Indiana 2
Iowa 5
Kansas 2
Kentucky 2
Louisiana 1
Maine 6
Maryland 3
Massachusetts 3
Michigan 3
Minnesota 6
Mississippi 3
Missouri 5
Montana 2
Nebraska 4
Nevada 3
New Hampshire 3
New Jersey 6
New Mexico 4
New York 3
North Carolina 3
North Dakota 6
Ohio 2
Oklahoma 2
Oregon 6
Pennsylvania 2
Rhode Island 10
South Carolina 3
South Dakota 6
Tennessee 3
Texas 2
Utah 3
Vermont 3
Virginia 5
Washington 3
West Virginia 2
Wisconsin 6
Wyoming 4
Credit: Diminished Value Car Appraiser
Step 2: Determine the market value of your car. You can get the market value of your car through a variety of websites, including Kelley Blue Book, Edmunds, and NADAguides. Insurance companies use the NADAguides value to determine the base value of a car.
Step 3: Base loss of value. Car insurance companies divide the NADAguide’s value by 10 to arrive at the base loss of value for a car that has been in an accident. This gives the largest amount you can expect a car’s value to drop following an accident. Some insurers do not use the base loss of value in the company’s calculations when determining diminished value.
Step 4: Damage multiplier. Once you know the base loss of value, you then multiply that amount by the corresponding multiplier from the damage multiplier table. The following damage multiplier table, from wikiHow, tells you how much to multiply the base loss of value of the car by according to how much damage it suffered in the accident:
Damage Multiplier Table
Damage Type Damage Multiplier
Severe structural damage 1.00
Major structural damage (including panels) 0.75
Moderate structural damage (including panels) 0.50
Minor structural damage (including panels) 0.25
No structural damage/No replaced panels 0.00
Credit: wikiHow
Step 5: Mileage multiplier. In addition to the amount of damage suffered, you must also adjust the diminished value claim amount by the total mileage on your car. The following table from wikiHow details the different multipliers according to how much mileage your car has on the odometer:
Mileage Multiplier Table
Number of Miles Mileage Multiplier
0 to 19,999 miles 1.0
20,000 to 39,999 miles 0.8
40,000 to 59,999 miles 0.6
60,000 to 79,999 miles 0.4
80,000 to 99,999 miles 0.2
100,000+ miles 0.0
Credit: wikiHow
Step 6: Determine total diminished value. To arrive at a final amount for a diminished value claim, first multiply the base value of loss by the damage multiplier. Then, multiply the damage-adjusted value by the mileage multiplier to get the total amount of your claim.
While many car insurance companies use methods that differ slightly, using the above information allows you to get a good idea on how much you can expect from a diminished value claim.
Ideally, you can get what you paid for when selling a car you originally bought new. And while accidents can diminish this value, filing a diminished value claim with your car insurance company can help you recoup any losses to the value of your car following an accident.

Easiest way to compare and buy car insurance

No long forms
No spam or unwanted phone calls
Quotes from top insurance companies
Find insurance savings — it's 100% free