How To Calculate Diminished Value After A Car Accident

If your vehicle is worth a lot of money, the last thing you want is to be involved in a car accident. But sometimes it’s out of your control.

Unfortunately, your car can’t ever be restored to its original value after a collision. Even if it looks the same as it did before and was repaired with top-quality parts and labor, the simple fact that it has been involved in an accident will reduce its inherent value.

You may be able to get some of that money back. Here’s how to calculate diminished value after a car accident and where to get help filing a claim.

Determine How Much Your Car Was Worth Before The Accident

The first step to calculating diminished value is finding out how much your car was worth before the accident. You can do this by looking up the Kelly Blue Book value of your vehicle using its year, make, model, and current condition. This figure is the starting value that you’ll use to calculate the percentage of lost value that the collision.

Find Out What 10% Of That Is

Once you determine the value of your car prior to the collision, you’ll need to calculate 10% of that figure. This is called a “cap” and is the most that an insurance company will pay for a damaged value claim.

For example, if you bought your vehicle new for $42,000 and was in an accident the next day, then your cap would be $4,200. This is because insurance companies assign a 10% loss of base value per accident and assume that you should be able to sell your car after the collision for only 10% less than what it was originally worth.

Figure Out Your Damage Multiplier

The next step is to adjust that figure depending on how much damage your vehicle sustained in the accident. You’ll do this by using one of the following damage multipliers:

• 00 – No damage to the structure of the vehicle
• 25 – Minor structural damage
• 50 – Moderate structural damage
• 75 – Major structural damage
• 00 – Severe structural damage

The more damage to your car in an accident, the more money you should get back from the insurance company and vice versa. So using the above example, if your cap is $4,200 and your vehicle sustained moderate structural damage, you would calculate the figure like so:

4,200 x 0.50 = 2,100

The figure that you end up with will be your new diminished value amount, which is ultimately what your insurance will pay if your claim is approved. In this case, it would be $2,100.

Then Calculate Your Mileage Multiplier

The last step is to apply the right mileage multiplier to the above figure depending on how many miles your vehicle has accrued over time. These are the multipliers you’ll use:

• 00 – 100,000+ miles
• 20 – 80,000 – 99,999 miles
• 40 – 60,000 – 79,999 miles
• 60 – 40,000 – 59,999 miles
• 80 = 20,000 – 39,999 miles
• 00 = 0 – 19,999 miles

The more miles there are on your vehicle, the lower the amount of your inherent diminished value will be. The opposite is true too, and if your vehicle is relatively new and doesn’t have many miles on it, you should get the most compensation available for this type of claim.

Again, using the same example, if you were left with $2,100 after you applied the damage multiplier, and your car had 24,000 miles on it, your next calculation would look like the following:

2,100 x 0.80 = 1680

This means that your final maximum diminished value total would be $1,680 and that’s the amount of money you can file a claim for compensation with your vehicle insurance provider.

In A Car Accident? Find Out How To Recover The Value Of Your Vehicle

Understanding inherent diminished value can be challenging and navigating the legal system to get the compensation you deserve is complex.

Our diminished value lawyers can provide you with the resources and legal representation you need to obtain the maximum restitution you deserve after a car accident leaves you with less value in your vehicle.

Get help calculating diminished value after a car accident and filing an insurance claim for reimbursement by contacting our experienced attorneys at (978) 744-8000. We’re available now to answer your questions and help you file a claim with your insurance company for the money that’s owed to you after a collision.