How to File a Diminished Value Claim in California

Filing a diminished value claim in California can help you recoup the invisible decrease in value in your car after an accident—but it’s a little tricky.
Written by Bonnie Stinson
Reviewed by Kathleen Flear
allows drivers to file a diminished value claim within three years after the accident. If you drive a high-value, low-mileage vehicle, you’ll want to pay close attention to this article! You’ll file a claim with the at-fault party’s
car insurance
and the payout would be made from their property damage liability coverage.

What is a diminished value claim?

If you get into a car accident in California where the other driver is found at fault, you can file against the at-fault driver’s insurance policy for repair costs and medical expenses. Every California driver is legally supposed to carry $15,000 per person / $30,000 per accident of
bodily injury liability coverage
and at least $5,000 of
property damage liability
per accident. 
But there’s another kind of damage that you can be compensated for: the diminished value of your vehicle after an accident. The statute of limitation in California for this type of claim is three years.
Even if your vehicle is repaired, its resale value after an accident is probably lower than its resale value before the accident. You can recover these costs by filing a claim for diminished value in California. Note that you cannot file for diminished value if you caused the accident yourself.

The three types of diminished value

Value can be a complicated figure to calculate. To encapsulate the complexity of a car’s value, there are three categories of diminished value in California:
  • Faulty repairs: the repairs themselves actually decreased the value of the vehicle
  • Immediate decrease: the decrease in value immediately after an accident and before repairs are made
  • Inherent (or stigma): you’ve made repairs but the vehicle’s accident history has diminished the value
In most cases, you’ll be filing for the inherent diminished value—and that’s what this guide will discuss.
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What is the difference between diminished value and depreciation?

Both depreciation and diminished value mean that your car is now worth less than it used to be. However, that’s where the similarities end.
All cars depreciate simply by existing. As new car models are released, technology evolves, and you put more miles on your car, it will decline in value every year. Depreciation is the inevitable result of age and use.
Not all cars get into accidents. Diminished value is a sudden drop in the value of a vehicle as the result of an accident. Even a car that is fully repaired will suffer a decrease in value because an accident will forever leave a mark on the car’s integrity.
Here’s an example to help you understand the difference.
Let’s say you are comparing two cars. Each one is a 2015 Toyota Corolla. Each car has 100,000 miles—but one of the cars was involved in two accidents. The model and mileage can be the same, but the vehicle with the accident history is worth far less.
MORE: Diminishing deductibles

What is the difference between a diminished value claim and a diminished value appraisal?

The appraisal is the first step in the claims process.
Before you can file a diminished value claim, you must get a diminished value appraisal. The appraisal is a process of determining just how much value the vehicle has lost due to the damage.
To research a diminished value appraisal on your own, use Kelley Blue Book to look at the market values of similar vehicles. You might prefer to hire a professional appraiser from a used car dealership or repair shop to get a more accurate figure, a certified report, and accurate compensation.

How to file a California diminished value claim 

The checklist for
filing a car insurance claim
is similar for all types of claims, and it starts with preparation. Before reaching out to your insurance company to file a California diminished value claim, you should do some research.
Do you fit the eligibility requirements for filing a diminished value claim?
  • You were not at fault in the accident
  • You own the vehicle outright (i.e. it is not leased or financed)
  • The vehicle has a clean record (aka no prior accidents)
  • The at-fault driver cannot cover the diminished value through their own property damage liability
  • You have a dollar amount to describe the diminished value of your car
If you can answer yes to all these questions, you can file a claim. Here are the steps for filing a diminished value claim in California:
  1. Document the diminished value. Get an appraisal and quotes from multiple mechanics to prove that the value of the car has decreased. You can
    calculate the diminished value of your car
    yourself by using the 17c formula, but your chances of success are not as high as if you use a professional appraiser.
  2. File the claim with the company. You should start by filing against the other driver’s insurance company. If the at fault driver is uninsured, contact your car insurance company and advise them of the situation. Diminished value is typically excluded from collision coverage, but may be covered under your uninsured motorist property damage coverage. 
  3. Wait for the company to decide. The insurance company makes the final decision about diminished value. Once you provide documentation, you must wait for the claims adjusters to do their job.
Your claim could be denied. If your claim meets all of the requirements, you may want to hire a car accident lawyer and go to small claims court. However, you should consider whether it’s worth the expense just to recover the diminished value—for the typical car, the diminished value amount is between $500 and $2,000.

The 17c formula: free diminished value calculator

We’ll let you in on an industry secret: the 17c formula.
You can use this basic formula to calculate a vehicle’s diminished value after a car accident. While we recommend getting an official appraisal by a trained professional, the 17c formula can help you get a ballpark estimate for your car’s diminished value. This can help you decide whether it’s even worth filing a claim.
Step 1: Find the pre-accident value of your vehicle. Look on Kelley Blue Book for cars of the same make, model, age, mileage, and condition as your car. Now, multiply this dollar amount by .10 (10%) to get the base loss value.
Step 2: Find the appropriate multiplier. This is based on how much damage the vehicle suffered:
  • 1 if the car has structural damage
  • 0.75 if the car has major panel or structural damage
  • 0.5 if the car has moderate panel or structural damage
  • 0.25 if the car has minor panel or structural damage
  • 0 if the car has no structural damage
Take the resulting number and multiply it by one of the following numbers:  
  • 1 if your mileage is between 0 and 19,999
  • 0.80 if your mileage is between 20,000 and 39,999
  • 0.60 if your mileage is between 40,000 and 59,999
  • 0.40 if your mileage is between 60,000 and 79,999
  • 0.20 if your mileage is between 80,000 and 99,999
  • 0 if your mileage is above 100,000
Your final number is the approximate value of the vehicle after your accident.

What is the statute of limitations for a diminished value claim in California?

Don’t wait to file your claim! In the state of California, drivers have three years to file a diminished value claim following an accident. But your car’s value will decrease even more as time goes on. 
If you attempt to file a diminished value claim beyond the three-year mark following the accident, you can expect it to be rejected. 

The bottom line

You can file a claim for diminished value in California by submitting documentation of damage, including an appraisal of the post-accident value of the car. You have three years following the accident to submit the claim. 
This type of claim is most useful for people who drive high-value vehicles with low mileage and no prior accidents. That’s because the decrease in value will be more significant for these vehicles than older, high-mileage cars.
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