Texas law doesn’t require insurance companies to use a specific formula to calculate diminished value, so each insurer is free to use its own method for determining how much your car’s value has decreased after an accident.
Many companies use the 17c formula to arrive at a number. It’s the most common method in the industry, even though it often undervalues the real loss.
What Is the 17c Diminished Value Formula?
To estimate the diminished value of a vehicle after an accident, insurance companies calculate the base vehicle value x damage multiplier x mileage modifier.
- Base Vehicle Value: What your car was worth before the accident, usually based on NADA or Kelley Blue Book.
- Damage Multiplier: A number between 0.00 and 1.00 based on the severity of the damage. Minor cosmetic damages can score around a 0.25, while major structural damage can receive a 1.00.
- Mileage Modifier: A number between 0.00 and 1.00 based on how many miles are on the car. Higher mileage results in a lower modifier, which decreases the estimated diminished value.
For example, if your car was worth $20,000 before the accident and suffered moderate damage, receiving a damage multiplier of .50, and had around 70,000 miles, receiving a mileage modifier of .80, here is how the 17c formula would be applied:
$20,000 x .50 x .80 = $8,000 diminished value
This is the amount the insurer may say your car lost in value, although in many real-world cases, resale value may reduce this value even more.
What Factors Affect the Amount of Diminished Value in Texas?
Insurance companies look at several factors when deciding how much value your car has lost. These include:
- Vehicle age
- Mileage
- Make and model
- Severity of the damage
- Whether the frame or structure was affected
- Quality of the repairs
- If the accident shows up on a Carfax or other history report
In general:
- Newer cars lose more value
- Luxury vehicles take a greater hit
- Well-maintained cars often have a higher diminished value
If you think an insurance company is ignoring these details or lowballing your diminished value claim, Houston car accident lawyer Joe Stephens can help you understand if you’re being treated unfairly, especially if your case involves personal injuries.
Why You Shouldn’t Rely on the Insurer’s Offer Alone
After an accident, insurance companies aren’t required to pay you the full amount your car lost in market value. Their offers often lean in their favor, not yours.
If you accept their first estimate, you might be leaving money on the table, but challenging a low offer takes more than just disagreeing. Most drivers don’t have the tools or experience to do that on their own. It takes a professional, credible valuation that can stand up to scrutiny.
When Joe Stephens handles your injury case, you won’t have to worry about fighting the insurance company alone. He knows how to spot undervalued claims and push back when insurers try to cut corners.
Are You Eligible To File a Diminished Value Claim in Texas?
Certain conditions must be met to file a diminished value claim in Texas. Here’s what matters:
- The other driver must be at fault: Diminished value claims are usually third-party claims filed against the at-fault driver’s insurance. You typically can’t file a claim with your own insurer unless your policy includes diminished value coverage.
- Your vehicle must be repaired: You can’t file for diminished value if the car was totaled or never fixed.
- There must be a measurable loss in market value: This means the car is now worth less despite being fully repaired.
- You must file within two years: Texas law gives you two years from the date of the accident to file a diminished value claim.
If your situation checks these boxes, you may have a valid claim, but insurance companies rarely make it easy. Joe Stephens can help evaluate your full case if a personal injury is involved.
A Texas Car Accident Lawyer Can Help You With the Claim
With over 40 years of experience, Joe Stephens has handled hundreds of car accident cases across Texas, including those involving diminished value losses. As a double board-certified personal injury attorney, Joe knows how to challenge lowball offers and fight for what’s fair.
Working with an experienced lawyer means:
- You won’t have to handle confusing forms or appraisals
- You’ll have someone who knows how to negotiate with insurers
- You can focus on recovery while Joe handles the legal details
If your accident also caused injuries, Joe Stephens can help you pursue full compensation, including diminished value when appropriate. Call today for a free consultation.
