Learn how insurance companies assign a monetary value to vehicles following a collision.
When your car is in an accident, its value is automatically reduced, even if the repairs seem to make it as good as new. The problem: your vehicle now has an accident history.
The post-repair value may be further reduced if imitation replacement parts were used to complete the repair, some of the damage was not repaired, or the repair was performed improperly.
The difference between what the car was worth before the auto accident and its value after being repaired is its diminished value. The extent of diminished value depends on several factors, perhaps including application of the 17c formula.
What is the 17c formula?
The 17c formula is the calculation that most insurance companies use to assign a monetary value to your car after it has been in an accident. This formula derives its name from the claims case in which it was first used, Mabry v. State Farm. Paragraph 17, section c of the Georgia code was applied in the case.
Although formula 17c was developed as a temporary method for calculating diminished value in only that case, the formula has been widely adopted as a standard by the insurance industry.
Is the 17c formula fair?
Although Georgia’s insurance commissioner does not endorse the use of the 17c formula, many insurance companies rely on this court precedent. Some may apply arbitrary numbers to vehicles damaged in dramatically different circumstances in order to minimize the amount of diminished value that they must pay to policyholders.
To protect yourself from potential abuse of the 17c formula, you could hire a certified appraiser to conduct a thorough analysis of the loss sustained by your vehicle. A good one will provide a careful assessment without using a cookie-cutter formula that may minimize your claim.
Making a Claim to Recoup Diminished Value
In Colorado, an insured person is entitled to make a diminished value claim against the party who negligently caused the damage to the automobile. The insured person may also make a claim against the collision coverage under his personal auto insurance policy. Colorado’s statute of limitations for diminished value claims is two years from the date of the accident. If you were at fault or if the damage was caused by something other than the accident, you cannot file a claim.
To recover on a diminished value claim, consult an expert experienced in evaluating the trade-in value of a vehicle. You must find out what the value of your vehicle was before the accident and its value now that repairs have been made. If it is found that your car is worth less by a given amount after having been fully repaired, this finding is the evidence you need in order to bring your claim. Present that evidence by sending it to the at-fault driver’s insurer or by filing a lawsuit against the negligent party.
If you or a loved one has been injured in an auto accident in Colorado, contact Dan Rosen at (303) 454-8000 or (800) ROSEN-911 to schedule a free initial consultation with an experienced personal injury attorney.