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What’s the Definition of “Diminished Value” in Florida?

Automobile accidents are no small matter. When you’re involved in a car crash, you’re going to be left dealing with your physical and mental health, of course. How will you pay for your medical care? Is everyone okay? You’re also likely worried about your vehicle. How will you get to work? Will your insurance cover the damages to your car?

A frequently overlooked aspect of receiving compensation following an accident is the diminished value of your car. If you live in the state of Florida, you may be entitled to receive financial compensation to cover the cost of the decline of the market value of your vehicle. 

In this guide, we’ll explore what diminishing value claims are, and the FL diminished value definition. Before you settle with an insurance company, read this guide; you may be entitled to more than the insurance companies are offering you. 

Florida Automobile Insurance: The Basics

In order to legally register and drive a vehicle in the state of Florida, you’ll need to purchase the appropriate vehicle insurance. This includes both Personal Injury Protection and Property Damage Liability. The minimum you are required to purchase is as follows: 

  • $10,000 per person, per accident for bodily injury
  • $20,000 bodily injury per accident for all people
  • $10,000 property damage coverage
  • $10,000 personal injury protection

As your insurance agent likely explained to you, there are additional coverages you can obtain. Only you can decide whether options such as collision or comprehensive coverage are right for you. The above listed, however, are required for every vehicle and driver. 

Florida is a no-fault state, which means that insurance carriers will presumably pay, regardless of who caused the accident. This, however, only applies to personal injury. Property damage claims can absolutely be made against the driver who caused the accident. 

Florida Diminished Value Definition

While it’s possible to file an insurance claim against an at-fault driver for damage to your car, most insurance companies won’t automatically cover the depreciation your vehicle suffers. Let’s look at an example. 

Imagine you drive a 2018 Ford. You’ve been considering selling your vehicle, and were recently offered $18,000 for your car. The buyer, however, obtains a copy of your vehicle history report and changes his offer to $14,000 after noting the accident. 

While this is a rough example of diminished value, the principle remains. An accident can decrease the value of your car, even if the vehicle is restored to like-new condition. 

The Florida diminished value definition refers to the difference between your vehicle’s value before and after an accident. There is a formula used by most insurance carriers to determine this value; we’ll look at that in the next section. 

How to Determine Your Car’s Diminished Value

When you file a diminished value claim with an insurance company, they’ll usually use a formula called the 17c formula to ascertain the dollar amount they’re willing to pay. You can follow along with this formula to get a general idea of what you can ask the insurer for. 

First, determine the value of your vehicle. This is the resale value, and you can find this in several ways. First, you can simply visit one of several websites online. NADA is the National Automobile Dealers Association, and you can find your car’s value here by inputting certain vehicle characteristics. You can also visit Edmund’s or Kelley Bluebook to get a ballpark estimate on your car’s worth. 

If you have a unique car, such as a Tesla or an antique, it may be worth the expense to enlist the assistance of an appraiser. Be sure to obtain a copy of the appraisal in writing; you will need it for the insurance company. 

The next steps are relatively straightforward. Your diminished value will be capped at 10% of the value. So, a $20,000 vehicle would be capped at $2,000. 

Finally, that “cap” will have two multipliers applied: damage and mileage. Depending upon the extent of the damage to your vehicle and the mileage on the odometer, you’ll multiply that cap by two numbers ranging from 0 to 1. The final result is your estimated diminished value. 

A simple Google search will help you determine your specific vehicle’s multipliers, or you may choose to seek assistance from a third party insurance company. 

How to File a Diminished Value Claim in Florida

While Florida is a no-fault state, and your insurance company is usually responsible for paying your expenses, the opposite is true for a diminished value claim. To file this claim, you’ll need to contact the other party’s insurance company. They will provide you with the form you need to initiate the action, or some may simply require that you write a written request. 

It’s important to remember that insurance companies are big businesses. It's extremely likely that your claim will be denied, or that the insurer will issue a low ball offer. Do your research ahead of calling or sending written notice to the insurer. By doing so, you can be more confident that the offer you receive is a fair one. 

As mentioned, we would recommend that you contact experienced professionals prior to getting in touch with an insurance company. In particular, your vehicle appraiser and your attorney will be your allies in the process of filing your claim and receiving the money you deserve. 

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John Morgan