Diminished value insurance

Diminished value insurance covers the loss in a vehicle’s market value after an accident and repair, as recognized by insurers like State Farm and Allstate. Insurers calculate diminished value using formulas such as the 17c formula, which multiplies pre-accident value by damage severity and mileage modifiers.

Most standard auto policies exclude diminished value coverage, but some carriers offer endorsements or riders for it. Policyholders can file diminished value claims against at-fault drivers’ liability policies in states including Georgia, North Carolina, and Florida.

Diminished value applies only if repairs are completed with OEM parts rather than aftermarket components, according to Progressive’s claims guidelines. Insurance companies often require documentation such as appraisals or dealer quotes to substantiate diminished value losses exceeding $1,000, as described by YourInsurance.info (Your Insurance Info).

Statutes of limitations for filing diminished value claims vary: Georgia allows up to four years from the date of loss; Texas permits two years. Leasing companies frequently prohibit lessees from pursuing diminished value claims unless explicitly allowed in lease agreements reviewed by Experian Automotive experts.